SINGAPORE — The Additional Registration Fee (ARF), the main car tax here, will be made more progressive with a tiered structure, which will replace the existing flat rate of 100 per cent of the Open Market Value (OMV).

The ARF for cars with OMVs up to S$20,000 will remain at the current 100 per cent, but two more tiers will be introduced for more expensive models. The next S$30,000 of the OMV of the car will attract an ARF rate of 140 per cent, and any value beyond S$50,000 will attract an ARF rate of 180 per cent.

“With the new ARF structure, a sedan with an OMV of about S$18,000, like a Mazda 3, will see no change in the ARF rate,” Deputy Prime Minister Tharman Shanmugaratnam said. “A car with an OMV of S$45,000, like an Audi A5, will incur S$10,000 or 22 per cent more ARF, while a luxury model with an OMV of S$74,000, like a BMW 735, will face a 42 per cent increase in ARF payable.”

The tiered ARF structure will apply to all cars, including imported used cars, and goods-cum-passenger vehicles registered with COEs obtained from the first COE bidding exercise starting next month.

For taxis, classic cars and COE-exempted cars that do not need to bid for COEs, the new ARF rates will apply upon registration of the vehicle on or after today. To give consumers and the motor industry more time to adjust to the changes, the Land Transport Authority said the first bidding exercise next month will be deferred by one week.

The tiered ARF structure will contribute about S$150 million in additional revenue annually, Mr Tharman said.

The Government will also take “the final step” to harmonise the tax rates between cigarette and non-cigarette tobacco products which began two years ago. Excise duties for beedies, ang hoon and smokeless tobacco will be raised by 25 per cent to S$299 per kilogramme, while excise duties for unmanufactured tobacco will be increased by 1.5 per cent to S$352 per kilogramme.