Tax break plan for R&D cars souped up

Christopher Tan, Straits Times 25 Feb 10;

A TAX waiver for green vehicles brought into Singapore for test-bedding has been made sweeter.

The Government has enhanced what is known as the Transport Technology Innovation Development Scheme (Tides), which allows vehicles such as electric cars, plug-in hybrids and fuel-cell cars to be exempted from certificate of entitlement, Additional Registration Fee and Customs duty.

This practically renders them tax-free.

In the Budget announcement this week, the Government said the Tides tax-free period has been extended from the original two years to six. The number of cars allowed under Tides has also been expanded substantially: from 300 units to 1,300.

The Government estimates that the enhanced scheme - first reported by The Straits Times on Feb8 - will cost $75 million in forgone taxes.

Several vehicle manufacturers, car dealers and fleet operators are applauding the move.

Daimler South-east Asia spokesman Helfried Scharf said: 'We are very happy to see the Government taking test-bedding so seriously.'

'We're working very hard' to secure a supply of cars for test-bedding here, he added, but did not give details. 'Hopefully, we'll have something to announce soon.'

BMW Asia spokesman Erin Atan said the enhanced Tides scheme could speed up BMW's decision to introduce such models here. It is expected to roll out its first electric Beemer by 2013.

She described the new scheme as 'fantastic news', adding that the company has been in dialogue with the Economic Development Board, which administers Tides.

Mitsubishi agent Cycle & Carriage, which has a ready supply of electric hatchbacks, cheered the tweaked scheme. C&C director of operations Alvyn Ang said the longer waiver period of the new scheme will allow users to depreciate the cost of the cars over six years instead of two.

'It removes a lot of uncertainty,' he added.

Asked for a list of vehicle types that will qualify for Tides, an EDB spokesman said any company that brings in vehicles for test-bedding can apply. 'But there's no guarantee everyone will get it. We will assess each applicant on its merits,' he said.

Green rebate for imported used hybrids as well
Samuel Ee, Business Times 23 Feb 10;

THE Green Vehicle Rebate scheme will be extended to imported used green vehicles, thus allowing used petrol-electric hybrids to enjoy the same lower registration taxes as new hybrids.

Finance Minister Tharman Shanmugaratnam said in his Budget Speech 2010 yesterday that he will 'expand the scope of the Green Vehicle Rebate scheme to include imported used green vehicles'.

This means used hybrid cars imported into Singapore will have to pay tax equivalent to only 40 per cent of OMV (open market value). The usual ARF (additional registration fee) payable for new or used petrol-engined cars is 100 per cent of OMV. But the used car surcharge of $10,000 will continue to apply to used hybrids.

Yesterday's announcement is the result of a proposal made to various government agencies by the Automobile Importer & Exporter Association (AIEA) last October.

'We are very happy with the government's positive response to our proposal,' said AIEA vice-president Jerry Low. 'We believe that if consumers are being encouraged to buy new hybrids, we should not discriminate against used hybrids.'

But as to whether he thought this meant importers will start bringing in more used hybrids now, he said it depends on demand.

'The market will react accordingly,' said Mr Low. 'If there is demand, there will be supply.'

He said the most important thing is that there is now a level playing field.

In yesterday's Budget Speech, Mr Tharman also touched on further incentives for clean technologies.

He said: 'To encourage test-bedding of clean technologies, I will enhance the Transport Technology Innovation Development Scheme (Tides) for new green vehicles.'

Tides is a scheme used to register expensive eco-friendly cars like the Mitsubishi iMiEV pure electric vehicle without registration fees or COE for four years. An ordinary Mitsubishi i with a 660cc petrol engine has an OMV of roughly $14,000. But the electric version - the iMiEV - has an OMV of almost $90,000 because of its sophisticated battery technology.

Based on the Green Vehicle Rebate, the iMiEV would cost $177,380. But with Tides approval, the list price of the iMiEV is only $90,000. That excludes an annual administrative fee of $1,600 to the government.

Over the next three years, 50 units of the iMiEV will take part in a $20 million test-bed project to test the electric vehicle infrastructure. The project will include the setting up of a pilot network of charging stations.