Debated in Parliament on 9 Sep 2014.
Mr Ang Wei Neng asked the Minister for Transport (a) what is the basis of increasing the Vehicle Entry Permit fees for foreign-registered cars from $20 to $35 per day and goods vehicles from $10 to $40 per calendar month; (b) what is the expected revenue increase arising from the increase in Vehicle Entry Permit fees; and (c) whether the Malaysian government has informed Singapore on their proposal to impose a fee on Singapore-registered vehicles entering Johor.
Mdm Speaker, our Vehicle Entry Permit (VEP) fee and the Goods Vehicle Permit (GVP) fee seek to equalise the cost of owning and using a foreign-registered vehicle in Singapore, with that for a Singapore-registered vehicle. There is a need to do so, given the significantly higher costs for Singapore-registered vehicles because of our Certificate of Entitlement (COE) policy, higher vehicle taxes and so on. By way of background, the GVP has been in existence since the 1960s and the VEP since the 1970s.
LTA periodically reviews these fees to ensure that they continue to serve their objective. The cost difference between owning and using a foreign-registered vehicle and a Singapore-registered vehicle has widened in recent years. This is why we need to revise the fees. I should point out that this is the first increase in the VEP fee in 20 years, the last being in 1994. The VEP is not always adjusted upwards. In fact, it was reduced in 2004 for foreign-registered cars because COE prices had gone down during that period, resulting in lower overall costs for Singapore-registered cars. The GVP fee had remained unchanged since its introduction until the recent revision.
Buses, taxis and motorcycles are not affected by the recent increase in VEP and GVP fees. In addition, all foreign-registered cars and motorcycles continue to enjoy around 125 VEP-free days per year, on top of daily VEP-free hours which are from 5.00 pm to 2.00 am, and which is extended to 12.00 pm to 2.00 am during Singapore's mid-year and year-end school holidays. Effectively, based on 2013 data, only about one in 10 foreign-registered cars
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that enter Singapore will be affected by the recent increase in VEP fee.
The VEP is not intended as a revenue generator. The VEP fees collected vary, depending on the number of foreign-registered cars and motorcycles entering Singapore and their length of stay during VEP-chargeable hours.
On Malaysia's proposed entry fee on non-Malaysia-registered vehicles entering Johor, we have not been officially informed of it by the Malaysian government. We are concerned whether it is directed towards Singapore vehicles. We have contacted the Malaysian government to seek details and are awaiting their reply before deciding on our response.
Mdm Speaker, I thank the Senior Minister of State for the comprehensive reply. We understand that the purpose of the VEP is to curb vehicle congestion during the peak hours and typically during the week days. Foreign-registered vehicles entering Singapore are given 10 VEP-free days per calendar year, besides not having to pay VEP during Saturdays, Sundays and public holidays.
My second supplementary question is about the higher toll charges imposed by Malaysia at the Causeway since 1 August 2014. Both MOT and LTA have indicated the intention for Singapore to match the same. However, many Singaporeans are concerned about the impact of the higher toll charges. Would the Senior Minister of State provide an update on this issue?
As I had noted earlier in our response, we have not had official word from the Malaysian government on what they intend to do regarding the entry permit fees that reportedly they would like to levy. Until details are made known to us, it is premature to comment on it. So, I would suggest that we not say anything more at this point in time.
Regarding the Causeway tolls, there is a Parliamentary Question (PQ) following this first PQ that relates to the Causeway toll, so I suggest we take it together with Question No 2.
PAPERCUTS