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Businesses brace themselves for impending Causeway toll increases

With no official announcements on when new tolls will be implemented, business leaders are raising concerns about an uncertain outlook, and fears that increased costs will be passed down to consumers. 

SINGAPORE: The impending increase in toll charges and levies for vehicles travelling between Malaysia and Singapore has led to growing concern among businesses that their earnings could be squeezed. Business leaders also worry that the increased costs could be passed down to consumers. 

Reports say toll rates for vehicles could be increased as early as this Friday (August 1), by as much as four times the current rate. So far, there have been no official announcements on when the toll increases will be implemented, just reports quoting officials from both Singapore and Malaysia. 

Mr Thomas Chua, President of the Singapore Chinese Chamber of Commerce and Industry, says this has created much uncertainty, and hopes both sides will work together to review the entire process.

"Both parties have to work on some solution and some consensus, then you tell the businesses from both countries how much it's going to increase. It's not the increment per se - the whole process I think is not very productive," he said.

Businesses are bracing themselves for a double whammy. If Malaysia decides to raise the toll for vehicles crossing the Causeway, Singapore authorities have said that they will in turn review the toll rates for vehicles entering Singapore.

In addition, Malaysia plans to impose a levy on foreign vehicles entering Johor by the end of the year, after Singapore said it would raise its levy for foreign cars entering Singapore.

According to reports, businesses say the hikes will be substantial, and some may be forced to pass on the costs to consumers.

Said Mr Kurt Wee, President of the Association of Small and Medium Enterprises: "If we have this increase which is going to represent quite a serious quantum for logistical trips for SMEs, of course those with higher-value goods may be less impacted, and those with lower-value goods will be much more impacted."

"At the end of the day, I think it will reach a level whereby businesses will feel 'this is a level of costs I cannot absorb, I have to pass on to my other business counterparts or the consumers.' So we can expect that it will be passed on for sure."

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