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S$9.2b to come from car taxes and COE premiums in FY2017
WITH more certificates of entitlement (COEs) available, the government expects to collect an additional S$76 million in car taxes and COE premiums over 12 months from April.
In the Budget for FY2017, it is estimated that a total of S$9.247 billion in motor vehicle taxes and vehicle quota premiums will be forthcoming - up 0.8 per cent from S$9.171 billion in FY2016, which closes at the end of next month.
Taxes and COE will account for 13.31 per cent of FY2017's estimated total operating revenue of S$69.45 billion; taxes and COE accounted for 13.36 per cent of FY2016's total operating revenue of S$68.667 billion.
For FY2017, motor vehicle taxes are estimated to amount to S$2.729 billion, up 18.2 per cent from the previous financial year's S$2.308 billion, thanks to steadily expanding COE quotas.
This comes about as more cars approach their 10th year, which is when their COEs expire; this leads to increased vehicle deregistrations, from which new COEs are recycled.
As the biggest dollar increase in funding source, motor vehicle taxes will boost FY2017's operating revenue by 1.1 per cent, together with higher contributions from customs and excise taxes and GST, for example.
Custom and excise taxes, which are also incurred when registering a vehicle, are estimated to jump 13.9 per cent to S$3.134 billion in FY2017.
But the government does not see revenue from COE premiums going up. Vehicle quota premiums of S$6.518 billion look set to fall 5 per cent from S$6.863 billion.
The government says the decrease is partly due to higher collections from increased COE quotas being offset by lower collections from fewer renewals expected.
Last year, a record 44,303 COEs were revalidated; this was a 70.1 per cent spike from 2015's 26,052, said the Land Transport Authority. The jump in renewals came from car owners who extended their COEs beyond 10 years instead of scrapping their vehicles.
In calendar year 2016, a bumper crop of 89,913 car COEs became available, up nearly 48 per cent from 60,888 COEs in 2015.
This year, some motor distributors say the number could be about the same, even without the contribution from the motorcycle COE quota to the open category COE quota.
- For more Budget 2017 stories visit bt.sg/budget17