SINGAPORE: The excise duty on diesel fuel has been increased from S$0.10 to S$0.20 per litre with effect from Monday (Feb 18), Finance Minister Heng Swee Keat announced during the 2019 Budget Statement.
As part of the Government's measures to restructure diesel taxes, Mr Heng said the excise duty for diesel will be doubled with "immediate effect". At the same time, he added that the annual special tax on diesel taxis will be permanently reduced by S$850.
AdvertisementThe measures followed changes in 2017 when diesel taxes for both cars and taxis were shifted away from an annual amount of tax towards a usage-based tax system.
"Over the years, we have implemented schemes to encourage early renewal of diesel commercial goods vehicles, and also to account for the impact of vehicular emissions. We have seen positive results. More owners are shifting towards more environmentally friendly engines such as electric hybrids. We are glad to see a drop in the numbers of new diesel cars and taxis registered," said Mr Heng.
In making the announcements on Monday, the minister strongly urged taxi companies to pass on the savings to their drivers, as they did in 2017, as this will "on average reduce the impact of the duty increase by more than three-quarters for taxis."
In a statement on Monday evening, taxi operator ComfortDelGro Corporation confirmed that it will be passing on the entire savings resulting from the reduction in the annual special tax for diesel taxis to its drivers.
AdvertisementAdvertisementROAD TAX, CASH REBATES FOR DIESEL VEHICLES
Additionally, Mr Heng added that the Government will also permanently reduce the special tax on diesel cars by S$100, and this will, on average, reduce the impact on the increase in the excise duty by more than half.
To help businesses adjust, Mr Heng said that the Government will provide a 100 per cent road tax rebate for one year, and partial road tax rebate for another two years, for commercial diesel vehicles. He added that the Government will also provide additional cash rebates of up to S$3,200 over three years for diesel buses ferrying school children.
In a news release later on Monday, the Land Transport Authority said these new road tax rebates will not apply to public bus services operating under LTA’s contracts and separate arrangements will be made with these bus operators under the provisions of the contracts.
"Diesel buses and goods vehicles will need to meet all the existing requirements for road tax renewal in order to receive the new road tax rebates. These include having valid motor insurance and passing vehicle inspections, where applicable," said LTA.
Meanwhile for diesel bus and goods vehicle owners who have paid the road tax for the period beyond Aug 1, 2019, the excess road tax paid will be automatically used to offset the amount payable at the next renewal.
"If the vehicle is transferred before its next road tax renewal, the excess road tax paid will be offset against the transfer fee payable, and any remaining excess road tax paid will accrue to the new registered owner," LTA said.
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