Some news from the south – according to a report, the Singaporean government is set to reduce the annual special tax on diesel passenger cars, specifically for vehicles that are Euro V-compliant, beginning January 1, 2013. The announcement was made by the country’s Minister of Finance, Tharman Shanmugaratnam, in the FY2012 Budget Statement.

Effective January 1 next year, the special tax for Euro V-compliant diesel cars will be rated at S$0.40 per cubic cm of engine capacity, with a payment of S$400 set as a minimum. Presently, vehicles that are Euro IV-compliant or higher are being taxed at S$1.25 per cubic cm of displacement.

Essentially, the revised structure – made in recognition of improved emissions of these vehicles compared to pre-Euro V ones – will result in nearly 70% savings for owners of such diesel passenger cars.

Currently, owners of an Euro V diesel car with an engine capacity of up to 1.6 litres has to fork out S$1,000 in tax every six months. With the new tax structure, the cost for the special tax is set to be lowered to S$320 for six months, translating to a S$680 reduction.

For engines displacing above 1.6 litres up to 2.0 litres, the current S$1,250 tax is set to be reduced to S$400, while that of 2.5 litre diesels, currently at S$1,563, will be brought down to S$500, with all figures for a six month period.

The report adds that motorists can choose to pay the special tax annually or every six months, together with the standard road tax. As for the special tax for diesel taxis and Euro IV diesel cars, the figure will remain unchanged at S$5,100 per annum and $1.25 per cubic cm respectively.