SINGAPORE: The excise duty on diesel fuel has been increased from S$0.10 to S$0.20 per litre with immediate effect, Finance Minister Heng Swee Keat announced during his Budget 2019 speech on Monday (Feb 18).
The excise duty was doubled as part of the Government's measures to restructure diesel taxes, Mr Heng said. At the same time, the annual special tax on diesel taxis will be permanently reduced by S$850.
The measures followed changes in 2017 when diesel taxes for both cars and taxis were shifted away from an annual amount of tax towards a usage-based tax system.
"Over the years, we have implemented schemes to encourage early renewal of diesel commercial goods vehicles, and also to account for the impact of vehicular emissions," said Mr Heng, adding that the move has seen "positive results".
"More owners are shifting towards more environmentally friendly engines such as electric hybrids. We are glad to see a drop in the numbers of new diesel cars and taxis registered."
In making the announcements on Monday, the minister strongly urged taxi companies to pass on the savings to their drivers, as they did in 2017, as this will "on average reduce the impact of the duty increase by more than three-quarters for taxis".
In a statement on Monday evening, taxi operator ComfortDelGro confirmed that it will pass on the savings from the reduction in the annual special tax for diesel taxis to its drivers.
ROAD TAX, CASH REBATES FOR DIESEL VEHICLES
The Government will also permanently reduce the special tax on diesel cars by S$100, and this will, on average, reduce the impact on the increase in the excise duty by more than half, Mr Heng said.
To help businesses adjust, commercial diesel vehicles will get a 100 per cent road tax rebate for one year, and partial road tax rebate for another two years. Diesel buses ferrying schoolchildren will also get additional cash rebates of up to S$3,200 over three years.
The Land Transport Authority said these new road tax rebates will not apply to public bus services operating under its contracts and separate arrangements will be made with these bus operators under the provisions of the contracts.
"Diesel buses and goods vehicles will need to meet all the existing requirements for road tax renewal in order to receive the new road tax rebates. These include having valid motor insurance and passing vehicle inspections, where applicable," said LTA.
For diesel bus and goods vehicle owners who have paid the road tax for the period beyond Aug 1, 2019, the excess road tax paid will be automatically used to offset the amount payable at the next renewal.
"If the vehicle is transferred before its next road tax renewal, the excess road tax paid will be offset against the transfer fee payable, and any remaining excess road tax paid will accrue to the new registered owner," LTA said.