Taxes to rise for luxury cars in Singapore

Luxury cars already cost an arm and a leg for their style, brand, and power. And now, their owners will have to pay more taxes for them too! Lawrence Wong, Singapore’s Finance Minister, stated in his 2022 Budget statement that a new tier tax structure would be introduced soon that will levy new taxes on luxury models.

The statement revealed that there would be a new ARF or additional registration fee payable for all Singapore vehicles, including goods and passenger cars and second-hand imported vehicles.

Suppose these vehicles have an OMV or open market value above SGD 80,000 under the COE or Certificate of Entitlement from the second bidding exercise. In that case, they will be considered under this structure. OMV will be the approximate car cost before taxes, while the ARF will be the direct tax payable after the vehicle registration in Singapore. The new tax structure will be in effect by the end of February.

Singapore’s LTA or Land Transport Authority elaborated that the new structure will present a better, more futuristic vehicle tax system. Some vehicles that will enter the new tax structure model include the Bentley Continental GT, the Lamborghini Urus, and the Porsche Cayenne. Some other vehicles too will be affected - those with OMV of over SGD 80,000. 

According to the new tax slab, the third 180% OMV structure is applicable over SGD 30,000, a significant increase from the previous rate. In addition, a new fourth tier will be added with 220% of OMV applicable on above SGD 80,000. 

For reference, before this new revision, the ARF used to be around 100% of the vehicle’s OMV for the initial SGD 20,000 of OMV. The next OMV of SGD 30,000 was 140% of OMV, while the third tier above SGD 50,000 was 180% of OMV. 

The revision was made after Neo Nam Heng, Automobile Importer & Exporter Assisiation’s adviser, requested a new tax structure. He thought buyers of such expensive luxury cars needed to pay more taxes. However, he is not satisfied with the new revision as he feels the increase is too mild to affect the ultimate rich. 

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