The Straits Times
www.straitstimes.com
Published on May 17, 2013
Govt seeks 'more equitable' COE system
Among the ideas: Impose surcharge on multiple-car ownership
By Christopher Tan Senior Transport Correspondent
OWNING a second car could attract a surcharge, as the Government considers ways to make the vehicle quota system more socially equitable. Another option on the table is to re-categorise cars to better separate luxury vehicles from mass-market ones.
Transport Minister Lui Tuck Yew said yesterday that the proposals were among the various suggestions the Government had received from the public.
He has asked the Land Transport Authority to consult the public and stakeholders before deciding on changes.
The Straits Times understands that any change could be implemented as early as next February.
Mr Lui noted that last year, luxury brands like BMW and Audi took up more than one-third of Category A certificates of entitlement (COEs), which are for cars of up to 1,600cc. In 2010, the figure was less than 7 per cent.
"While this is a reflection of increasing affluence and consumer preferences, we also want to make sure Cat A, which is intended for buyers of smaller, budget cars, retains its original purpose."
Ways to do this could include re-categorising COEs by engine power, or to apply another criterion on top of engine capacity.
As for the proposal to impose extra levies on multiple-car owners, Mr Lui said it was "extremely difficult" for the Government to decide "who should be allowed to own cars and how many". That should best be left to the market.
But he added that there may also be merit in linking multiple- car ownership to "proportionately" higher levies - even though such a scheme could "fuel anti- wealth sentiments" and also be easily circumvented.
Mr Ron Lim, general manager of Nissan agent Tan Chong Motor, said: "If people want to get around such a rule, there are so many options, such as registering a car under another name."
He said care should be exercised in COE re-categorisation. If a car's power rating is used, strict enforcement is needed to prevent owners from tuning up the engine after registration, for instance.
Transport Government Parliamentary Committee member Lim Biow Chuan welcomed a review. "Ultimately, what we are looking for is social equity. Cat A is really intended for the man in the street who wants a basic car to transport him from point A to B. My sense is they are being crowded out... because of all the luxury vehicles that are in Cat A as well."
He said a balance will have to be struck between over-taxing the rich and meeting the interests of the man in the street.
About 7 per cent of motorists currently have more than one car. Retiree K.S. Ong, 57, who is one of them, believes car ownership is not an entitlement, and how COEs are distributed should be determined by market forces.
"People just have to accept that the world is competitive. Not everyone in London, New York and Hong Kong owns a car. Those who do pay through the nose."
But another retiree, Mr Lee Kok Meng, 56, said segregating luxury and everyday cars is "a good idea", but "the difficulty is in drawing the line" between the two.
He said a better way would be to have premiums pegged to a car's open-market value. That way, those who buy up-market cars will end up paying more.
Said Mr Lee: "Then you may not even need different categories or any other surcharge."
christan@sph.com.sg
Additional reporting by Royston Sim
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