Practically all of Singapore’s car taxes are based on a vehicle’s open market value (OMV). Even the newly introduced tiered-ARF (Additional Registration Fee) is OMV-based. So, why not align the way we categorise COEs with this principle, which has proven to be sound for more than 50 years?
Instead of applying engine power and displacement caps, we should have a neater format whereby cars with OMVs of up to $20,000 are put in Category A, and the rest in Category B.
The Transport Ministry has persistently dismissed the OMV method. It says OMVs are prone to fluctuations, and thus not a good measure. But if that is the case, the whole car taxation regime, which basically hinges on OMV, should be reviewed or perhaps dismantled. Especially the tiered-ARF system.
In any case, fluctuations can be addressed by stricter valuation methods. Of course, that would require the cooperation of another ministry altogether, which may be more daunting than it appears.
