Valuation Method

4.9 The Government will change the basis for valuing motor vehicles. We will change from the Brussels Definition of Value (BDV) method to the Customs Valuation Code (CVC) method. This new basis will exclude obligatory expenses such as advertising, promotion, warranties, showroom and warehousing costs from a vehicle's taxable value. The effect will be to decrease the ARF and excise duty payable for most vehicles by 3% to 5%.

4.10 This is consistent with our policy of gradually lowering the costs of owning a car and raising usage costs, in order to strike a better balance, and enable more Singaporeans to own cars. For a typical 1,500 cc car with an assessed open market value or OMV of $15,000 under the existing valuation system, a 5% tax saving would amount to about $1,100.

4.11 This change will take effect from 1 April 2003. Details about the valuation method can be found in Annex I.