Budget 2026: 45pp lower Parf rebate for cars; tobacco excise duty raised 20%
Change in Parf rebate will apply to all cars registered with COEs obtained from the next bidding exercise in February
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[SINGAPORE] Singapore will lower the Preferential Additional Registration Fee (Parf) rebate by 45 percentage points, and lower the rebate cap to S$30,000 from S$60,000, said Finance Minister Lawrence Wong in his Budget 2026 speech on Thursday (Feb 12).
This means that the Parf rebate for cars above nine years, but not more than 10, will be revised to 5 per cent of the Additional Registration Fee (ARF) paid, from the current 50 per cent.
The move comes as electric vehicles (EVs), which are less polluting than conventional petrol cars, become more common. Hence, the need to encourage early deregistration through the Parf rebate is reduced, noted Wong, who is also prime minister.
Currently, car buyers are taxed through Parf to encourage the timely renewal of the vehicle population so that it is safer and less polluting.
The change will apply to all cars registered with Certificates of Entitlement (COEs) obtained from the next bidding exercise in February 2026.
For cars that do not need a COE for registration, the revised Parf rebate schedule and cap of S$30,000 will apply to those that are registered on or after Feb 13.
Singapore is also implementing a 20 per cent increase in tobacco excise duty across all tobacco products, with effect from today.
This is to discourage the consumption of tobacco products, PM Wong said.
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The government previously raised excise duty on all tobacco products by 15 per cent during Budget 2023.
The prime minister noted that Singapore’s prudent fiscal approach remains one of its core strengths, and the changes made in the last term of government have put the Republic on a “healthy and sound” fiscal footing.
“We have a tax and transfer system that is fair, progressive, and anchored on shared responsibility,” he added.
“This gives us the capability and confidence to move forward.”
For more of BT’s Budget 2026 coverage, go to bt.sg/budget26
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