SG Budget 2017: Motorbikes ARF & Water Tax Increase

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SG Budget 2017: Motorbikes ARF & Water Tax Increase

SG Budget 2017: Thoughts on Motorcycle ARF & Water Tax Hike

SG Budget 2017: Thoughts on Motorcycle ARF & Water Tax Hike

One of the major events that Singaporeans would listen to in the news is SG Budget 2017. And not only Singaporeans tune in to it, foreigners, PRs and businesses tune in to see how the measures that the Singapore government will be doing in place of the financial year. This year, we look at the economic factors that are the hot topics amongst the people on SG Budget 2017.

With the SG Budget 2017 theme ofMoving Forward Together, Finance Minster Mr Heng Swee Keat made his first major policy speech (Feb 20) and outlined plans that will put Singapore in good stead for the future.

Motorbikes Additional Registration Fee Model (ARF Hike)

This round, motorcyclists were affected in the latest wave of policy changes. Based on statistical data, there’s a growing number of motorcycle buyers going for expensive bikes hence prompting the introduced of a tiered additional registration fee. Thus high-end motorbikes – from makes such as BMW, Harley-Davidson and Ducati will be substantially costlier than they are today.

The Additional Registration Fee or ARF for more expensive motorcycles will go up.  As of now all motorcycles incur only a flat ARF of 15 per cent. So if the open market value or OMV of your motorcycle is higher than $5,000 ARF will be 50% of the OMV.  ARF will be 100% of the OMV for motorcycles beyond $10,000.

Cooling the Motorbike COEs

Certificates of Entitlement (COEs) from deregistered bikes will no longer contribute to the Open category COE supply creating a move that aims to stabilise the declining numbers of motorcycles. Even so, COE prices have continued to surge as there’s speculative trading by big players and new entrants such as food delivery companies creating additional demand.

A spokesman for the Land Transport Authority (LTA) said that the tiered ARF is “calibrated to ensure that the majority (about 60 per cent) of newly registered motorcycles will be unaffected”.

SIM University economist Walter Theseira said that this change will stop the “bleeding” of motorcycle COEs, which flow to the Open category but are not returned to the motorcycle population.

The main rationale is to target buyers of expensive bikes with the introduced of tiered taxation in the ARF. Such a tiered ARF system affected 85% of car models sold in Singapore. 

30% Water Tax in SG Budget 2017

Another hot headline topic was the increase in water tax which affects everyone in Singapore. The increase spark a series of headline news over the world with even international news agencies reporting it. 

When and what is the price increase.

Prices will go up by 30 per cent in two phrase. The first price hike will be from July 1 this year, and the second price hike will be July 1 next year.

“Water prices were last revised in 2000, almost 20 years ago. We need to update our water prices to reflect the latest costs of water supply,” Mr Heng said in the 2017 Budget speech in Parliament.Business affected by SG Budget 2017

The Water Conservation Tax will increase to 50 per cent. In addition to the water tax, there will 10 per cent water conservation tax on Newater for business users. The tariff will increase to $1.19 per cubic metre in July and then to $1.21 per cubic metre next year. The waterborne fee will increase to $0.92 by 2018.

The sanitary appliance fee and waterborne fee will be restructured to become a single volume-based fee. This is a bid to discourage water wastage. An increase of less than $18 per month will be seen in three quarters of households and less than $25 per month increase in three waters of businesses. 
To aid households, the government is increasing the amount of U-Save rebates costing an additional $71 million a year. About 880,000 HDB households will stand to benefit from this increase. 
The contraversial price hike is due to safeguards in place as unpredictable weather patterns have caused water levels at the Linggiu Reservoir in Johor to fall drastically. The reservoir supplies about 60% of Singapore’s water needs. 
Singapore has long invested in desalination and Newater plants and the new taxation schemes will go towards the maintenance of the facilities. Singapore gets water from four National Taps – Newater, water from local catchment areas, deflation and imported water.

“Rising costs of resources and the use of more complex development approaches have exerted upward pressure on the costs of producing and delivering water,”- Minister for the Environment and Water Resources Masagos Zulkifli


As demand for water is projected to double by 2060, considerations have to be made to get Singapore to be ready through water desalination and Newater project. The last water increase was in 2000. 

SG Budget 2017 outlines how we can thrive in an uncertain and rapidly changing world.

Although with U-Save rebates to help offset the rising cost of living in Singapore, this move seems to be targeted at businesses to discourage them from wasting water. However that being said, the new economy outline ahead seems brink as the rising costs in many sectors will eventually affect everyone.

PUB releases new utilities bill charges based on SG Budget 2017

PUB releases new utilities bill charges based on SG Budget 2017

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