Tax Changes For Companies

Extension of One-Year Accelerated Depreciation Allowance Scheme to Replacement of Diesel-Driven Vehicles

With a growing vehicle population in Singapore, total emissions from vehicles will creep up over time. This will adversely affect our ambient air quality and may become a health concern. We therefore need to impose strict emission standards on new vehicles and at the same time, reduce the number of older vehicles on the roads

Diesel-driven commercial goods vehicles and buses are allowed to be used on the roads for up to twenty years. Old and inefficient diesel-driven vehicles are a major source of pollution as they generate a disproportionately large amount of particulates and other pollutants that are harmful to health.

The cost of replacing an old vehicle with a new one is high. As a result, older vehicles are generally not taken off the roads before the end of their statutory lifespan. One way of encouraging owners of older vehicles to do so is to provide a tax incentive to partially defray the high cost of replacing vehicles.

I have therefore decided that with effect from 27 February 1999, the one-year accelerated depreciation allowance scheme would be extended to the purchase of new commercial goods vehicles and buses, on the condition that the new vehicle is replacing an old diesel-driven vehicle which was registered before 1 January 1991, and which either has at least one year of valid COE left or is eligible for COE renewal. Ministry of the Environment will administer the scheme.