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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.
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