Written Reply by Minister for Transport Ong Ye Kung to Parliamentary Question on Additional Surcharge on Certificates of Entitlement for Owners Purchasing Second Vehicle or More

Mr Zhulkarnain Abdul Rahim asked the Minister for Transport apart from higher surcharges and increased rebates to promote cleaner and electric vehicles, whether the Ministry will consider an additional surcharge upon certificates of entitlement for owners purchasing their second vehicle or more.

Reply by Minister for Transport Ong Ye Kung:

1.     Our assessment is that an additional surcharge on owners purchasing their second vehicle will not likely have any impact in terms of promoting cleaner vehicles. General incentives and surcharges on cleaner or pollutive vehicles respectively, without linking to the number of vehicles owned by the buyer, will be more effective.

2.     The objective of any surcharges on second vehicles is more like a wealth tax. But it will be a policy fraught with problems. It is difficult to judge when a second-time buyer is less deserving than a first-time buyer. For example, a bigger family with many children and grandparents may genuinely need more than one car. There will also be loopholes, such as buyers registering the car in the name of another family member. We will have to introduce many more rules, which would add to the complexities of the COE system.