Star Bamboo Singapore

The big news for car lovers in Singapore was the announcement that the Singapore Government will be reducing the annual tax on Euro IV diesel passenger cars from July 2008.

Currently, the diesel tax is four times the annual road tax of a petrol car with an equivalent engine capacity. But, from July 1 2008, the formula is changed to $1.25 per cubic cm of the car’s engine displacement.

That works out to be $2,500 for a 2,000cc car, down from $4,856 now, or a 49% cut.

The change in the diesel tax formula is probably to pre-empt a 15% reduction in road tax come July 2008. By un-pegging the diesel tax from the road tax, the Government will have greater room to manipulate the demand for diesel passenger cars.

If the intention of the tax cut is to encourage greater use of diesel vehicles, then it obviously doesn’t go far enough. Some analysts estimated that one would need to drive 70,000km per year just to offset this tax.

The signs are that the Government is waiting for Euro V vehicles to be more widely available after 2009.

I think it’s rather unfortunate. Diesel cars have lower CO2 emissions, better acceleration, and superior fuel economy. Why wait until 2010?

If pollution is a concern, then the number of old Euro II diesel commercial goods vehicles and taxis plying Singapore’s roads should be much greater cause for concern.

Once again, as with the incentives for hybrid cars, it’s a matter of “too little, too slow”.

I love cars.

So do 4.5 million other Singaporeans.

The problem is that there is limited land in Singapore. So there are various measures in place to limit the number of cars on the road, such as the COE car ownership quota system and high car taxes.

The road tax is calculated based on the engine capacity of the vehicle, and designed to encourage small cars especially 1600cc and below.

I don’t quite agree with this but at least it makes sense: small-engined cars are, as a rule of thumb, more fuel-efficient than those fitted with thumping V8 powerplants.

Singapore is a city-state, so we spend most of our time in start-stop traffic. This is exactly the scenario that hybrid cars are designed for.

Hybrid cars, such as the Toyota Prius and Honda Civic Hybrid, have a conventional petrol and an electric motor. At low speeds, they are powered solely by the electric motor. The petrol engine only kicks in at higher speeds, making them eminently ideal for urban driving.

So why is Singapore discouraging the ownership of hybrid cars?

Read the rest of this entry »