Buyers of green cars in Singapore will continue to enjoy tax breaks for another two years, but for drivers of compressed natural gas vehicles (CNG) the rebate will end shortly after.
According to the existing scheme, hybrid, electric and CNG vehicles are given a 40 per cent cut in the Additional Registration Fee until the end of this year – a rebate that has been in place since 2001 when it began as a 20 per cent reduction. This has now been extended to 2011.
The idea was to help offset the higher cost of green cars with a Toyota Prius retailing for around $84,488 in the region compared to $51,988 for the similarly sized Toyota Corolla Altis.
However, the tax exemptions for CNG vehicles are coming to an end – from January 2012 they will be taxed at the pump, just like petrol cars with duty phased in at 20 cents per kilogram of gas compared with 41 cents per litre of petrol.
According to the finance minister Tharman Shanmugaratnam, the appropriate long term CNG duty rate would be studied and benchmarked against the prevailing petrol duty rate to reflect the relative impact the fuels have on the environment.
It is believed that by 2012, the rebate will have “done its job” in encouraging a critical mass of CNG cars. It is likely that the green car rebate scheme will be enhanced in the future.
