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A look at the new tiered ARF structure

By PetrolHead on 27 Feb 2013

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On Monday, the 25th of February 2013, the annual Budget statement was announced by Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam. He announced a lot of stuff to what people call 'Robin Hood' budget, taxing the more affluent people to aid the poor.

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Among the announcements, one was regarding the tiered ARF structure – that replaces the current 100 percent ARF value of the Open Market Value (OMV) for cars, taxis, and goods-cum-passenger vehicles.

The new tiered ARF structure will apply to every car that is registered under COEs obtained from the upcoming COE bidding exercise from March 11 – 13, 2013.

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For cars with an OMV value of up to $20,000, the ARF value is at 100 percent of OMV value.
ARF = OMV

i.e. if the OMV of a vehicle is $15,000, the ARF will be valued at $15,000 as well.

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For cars with an OMV value between $20,001 to $50,000 the ARF rate will be 140 percent of incremental OMV – the difference from $20,000.

[(OMV-$20,000)×140%] +$20,000 =ARF

For example if the OMV of a vehicle is $30,000
[($30,000-$20,000)×140%] +$20,000 =$34,000

Thus, for a vehicle with an OMV of $30,000 the ARF is valued at $34,000

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For cars with an OMV above $50,000, the ARF value is 180 percent of incremental OMV – the difference from $20,000.

[(OMV-$20,000)×180%] +$62,000 =ARF

For example, if the OMV of a vehicle is $75,000
[($75,000-$20,000)×180%]+$62,000 =$107,000

Thus, for a vehicle with an OMV of $75,000 the ARF is valued at $107,000

Do note all the ARF values are before any CEVS rebates.

According to The Straits Times, the increased ARF rates will contribute around $150 million annually. With the change, luxury cars like an Audi A5 or a BMW 5 Series will see ARF costs rising as much as 22 percent or 42 percent respectively.

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PetrolHead
Written by PetrolHead
A passionate motoring enthusiast since little, Akram's articles gives alternative insights on the latest motoring news.



 
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