How does Singapore’s 2022 ARF car tax increase affect you?

Derryn Wong

Revised Additional Registration Fee (ARF) car tax for Singapore will hit the most luxurious models with big price increases

SINGAPORE – Finance Minister Lawrence Wong announced increases to car taxes at Budget 2022 today. The changes mean an increase to the Additional Registration Fee (ARF), which typically makes up the largest single tax for cars in Singapore.

The changes mean more tax for cars with an OMV (Open Market Value) of more than S$80,000, which means more expensive luxury cars such as the Mercedes-Benz S-Class. The majority of mainstream cars, which aren’t that expensive and typically stay below S$80k OMV, remain unaffected. Our Theoretical Model 1 below, for example, would be around the same price as a BMW X5.

2022 Singapore ARF Car Tax Increase - Example of increase
Figures rounded up, Basic Price means no COE, no markup, no GST or duty.

The tiered ARF structure based on OMV will be extended. Previously, the first S$20,000 of OMV incurred 100 percent tax, the S$20,000 to S$50,000 band 140 percent tax, and above that, 180 percent. Now, the S$50,000 to S$80,000 band incurs 180 percent, while anything above S$80,000 receives a 220 percent tax rate.

The new tax structure begins from the next COE bidding round from February 21 to 23, 2022.

To get an idea of how much a car’s OMV is, you can reference this PDF from the LTA showing OMV values from January, and our table above.

One of the least expensive cars, the Kia Sonet, has an OMV of S$16,435. A mainstream sedan like the Mazda 3 1.5 Classic rings in at S$19,783, while a BMW 318i has an OMV of S$41,517, and list price of S$231,888 with COE. A BMW X5 xDrive40i, which costs close to S$400k here, had an OMV of S$84,652. The Mercedes-Benz S 450L had an OMV of S$107,096 and a list price of S$545,888 with COE. The Bentley Continental GT Speed’s OMV of S$294,230, list price of around S$1.1m. 

The immediate effect of this is that it could put a damper on sales of the very upper-crust of motoring. The last time the ARF was hiked was back in 2013 and it caused a mini-boom of sales to meet the tax hike deadline. However nine years on, things went back to (sort of) normal, and Singapore saw excellent sales of ultra-luxury car brands in 2021. 

2022 Ferrari 296 GTB Singapore - front 3/4 view

In fact this year was looking a lot the same – McLaren took the covers off its rather expensive 765LT, while Ferrari just unveiled its new PHEV sports car, the 296 GTB yesterday.

This comes amidst a backdrop of increased taxation for the affluent in the Budget 2022, including property taxes. 


arf luxury Singapore tax

About the Author

Derryn Wong

CarBuyer's former chief editor was previously the editor for Top Gear Singapore and a presenter for CNA's Cruise Control motoring segment.

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