Study on Re-classification of Category C Certificate of Entitlement

Er Dr Lee Bee Wah asked the Minister for Transport for SMEs which need to have vehicles for their business (a) whether the Ministry is studying the re-classification of Category C (Cat C) COEs and, if so, when will the study be completed; and (b) what other measures are in place to help SMEs, besides the Early Turnover Scheme for earlier replacement of their diesel vehicles, and allowing Cat C COEs vehicle owners who had renewed their COEs for five years, a further five year COE renewal.

Certificate of Entitlement (COE) policies are reviewed on an ongoing basis.

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There are several measures to help businesses manage the cost of vehicles. First, commercial vehicles are subject to lower vehicle taxes. The Additional Registration Fee for commercial vehicles is set at 5% of the vehicle's Open Market Value (OMV), compared to an effective rate of 100% to 180% of OMV for cars. They also enjoy lower effective road tax and are exempted from diesel fuel taxes. Second, businesses are allowed repeated five-year renewals of their COE. This facilitates their cash flow management. Third, under the Early Turnover Scheme, businesses can transfer any unused COE life to a new vehicle and enjoy discounts if they replace their more pollutive Pre-Euro/Euro I diesel commercial vehicles. In addition, they only need to pay a discounted Prevailing Quota Premium and do not need to bid for a new Category C COE.

These measures are complemented by other Government schemes to assist all small and medium enterprises directly with tax deductions, grants or micro-loans.