People come to this blog daily to read about riding motorcycles in Singapore, or how to maintain their two wheelers. Thank you for being a reader, but I am afraid this may be my very last post on motorcycles.
You see, motorcycles are systematically being wiped out in Singapore by policymakers. Very soon, there will be little to write about the joy of motorcycling here.
From meager motorcycle quota allocations to $6,000 Certificate of Entitlements that cost more than small capacity motorcycles, SG riders have had to endure all sorts of transport policies that hint persistently that bikes are not really desired on our streets.
This week, the final nail in the coffin came when it was announced that there would be a new three-tier taxation regime imposed on motorcycles. Already, new large-capacity bike prices are increasing by up to an additional $27,000 (or the price of a brand new 1000cc Japanese sports naked)
Here’s a quick cut and paste from Asiaone on how it works and some 2016 statistics :
All motorcycles currently incur a flat ARF (Additional Registration Fee) of 15 per cent of their open market value (OMV).
Under the new system, while the ARF for motorbikes with an OMV of up to $5,000 will remain at 15 per cent, the next $5,000 will incur an ARF rate of 50 per cent. The remaining OMV of above $10,000 will have an ARF rate of 100 per cent .
Of the 8,355 newly registered motorcycles here last year, 63 per cent had an OMV of $5,000 and below.
Those with an OMV of between $5,000 and $10,000 made up 19 per cent, while those with an OMV of above $10,000 made up 18 per cent – or about 1,500 – of all newly registered motorcycles here.
(Update 6 Mar 2017 : LTA has begun publishing the average OMV prices on the Onemotoring site. See Jan 2017 figures here. From this chart, you can straightaway see that many Class 2 commuter bikes (eg. Honda 750cc models) have OMVs between $5000 and $10,000, while Class 2 sport or touring bikes are naturally above that. Even the standard naked Honda Super 4 is hit by the ARF hike, albeit by $1200+. )
So while the rest of my social media feed (filled with biker friends) went nuts and shook their fists at the government, I was kept busy with work until today when I found some free time to do the sums.
The maths question for me was – How much will this new ARF tax really add to the government coffers?
If you read all the news stories on this change, I don’t think the government actually said the additional tax is to manage congestion like the COE. Instead, they just said something like “oh, there are bike owners who pay the same OMV as cars, so we’ll tax them more.”
In essence, this is a luxury tax. I thought – this had better be worth all the trouble with new system implementations, so we can have more sheltered walkways, nice parks and anti-diabetes campaigns if lots of revenue can be generated from “wealthy” bikers.
Now back to the sums.
Assuming next year, the number of motorcycles purchased will be the same as 2016 (8,355 bikes), and the mix of vehicles remain exactly the same, I also assumed average OMVs to be $7,500 and $15,000 for the two classes of bikes that will be taxed more.
Total additional tax revenue came up to $13.3M.
Then I assumed a more realistic Scenario B – less bikes get sold overall, more people buy a bike with OMVs between $5-10K, and less people buy high-end bikes. And say maybe people who do buy high-end bikes spend even more money (since they must be loaded), so average OMV goes up to $20K.
Total additional tax revenue came up to $16.8M.
Hmm, that can’t be right, that’s a little low, I thought.
So I did my sums a few more times. I even went into the LTA Onemotoring site to check vehicle registration and COE statistics and calculated a few other ways.
This is the after-effect of working in Microsoft where everything needs to be calculated before we debate it. The sum still came up to about $12M with my alternative formulas. So let’s stick to $16.8M.
Now do you know how much $16.8M matters in the overall scheme of vehicle taxation? It’s a numerical rounding error.
According to this Business Times article, the government expects to collect $9.2 billion in car taxes in FY2017, including COE.
WITH more certificates of entitlement (COEs) available, the government expects to collect an additional S$76 million in car taxes and COE premiums over 12 months from April.
In the Budget for FY2017, it is estimated that a total of S$9.247 billion in motor vehicle taxes and vehicle quota premiums will be forthcoming – up 0.8 per cent from S$9.171 billion in FY2016, which closes at the end of next month.
The additional motorcycle tax (that I calculated) would amount to 0.18% of the total $9.2B tax collected. Yes, not even half a percent. We should spend all our time courting car owners instead right?
The additional motorcycle tax would amount to 22% of the additional $76M tax collected. That’s not too bad, said my Excel worksheet.
So from a totally emotionless perspective of a civil service bean counter, the additional motorcycle ARF tax does move the needle for the powers-that-be. The maths answer is positive, there is a significant outcome, thus it should be passed into law. And it did.
How should I feel about this?
Well, there really is no point arguing, especially with a policy that benefits the “greater good” with somewhat more government moolah to spend on nation-building.
(Trivia : My assumption of $16.8M additional tax can be spent on organizing four sessions of Singapore Days to coax our diaspora to come home from overseas and reduce the constant brain drain. Or maybe even convince a few hundred more fertile couples to have babies.)
I’ve lived 40 years in this country, and I’m used to this sense of helplessness in the world’s most expensive city. The only time anyone in power really gets worried about your opinion is when they are about to lose electoral votes, and the next General Election is three years away.
Furthermore, the Land Transport Authority has not bothered much about the policy protests of motorcyclists, since we represent little more than the minority riff-raff on noisy tiny vehicles which get into fatal accidents all the time. So why not just silence this minority group with the usual Singapore method of making things more expensive?
I could go on and on about how larger, more expensive motorcycles are safer (better brakes and stability), how we don’t add to congestion, how we actually ride/drive more safely and skillfully than most people (since we’re not already dead from reckless riding) and how nice the wind feels blasting across your face and shoulders. But I will stop at this one paragraph.
Where the government policies are made, nobody really worries about motorcycles and their owners. They’ve probably never ridden a motorcycle before. They’ve never stepped into a nice, friendly motorcycle showroom, of which there will be less in existence next year.
I don’t know how many ministers can ride a motorcycle, but I have not seen any of them do so before. I don’t see them taking public transport very much either.
So perhaps they may just regard protests about broken-down trains and unaffordable motorcycles as temporary inconveniences, it’ll blow over with time, folks. People get used to it, let’s move on.
And to be honest, it’s not even about the ministers, but their busy subordinates who come up with these proposals because they may have said, “Sir, it’ll add a fifth to additional tax revenue, sounds good? Just sign here please. We’ll update the media and website tomorrow.”
In addition, most of your friends and families will tell you it’s a good thing, since “Motorcycles are so dangerous! Don’t ride ah, boy! Waste money and probably lose your life tomorrow! Don’t you dare!”
This is no country for bikers
Bikers, like most people, believe that the world should revolve around them. Wake up people, look at how your environment has changed.
Salesmen pitching overpriced condos, restaurants selling expensive dishes, young people often suckered into drinking $6 sweetened water daily, and an economy that wants you to keep spending on useless material goods so retail doesn’t go out of business and tourists keep coming.
What did you say – pay “just” $20K and you can own a vehicle that can accelerate faster than almost every $1M supercar from the stop line? Preposterous! They ought to be more expensive!
The rich will continue to buy expensive motorcycles, they always have, and they are but a small handful. (These taxes mean little to them).
And the rich will be satiated if these high-end motorcycles will still imported into the country as demand plunges from the rest of the population grappling with increasing medical insurance costs and disruption to the traditional industries.
How about the smaller bikes? Few of us experienced riders believe that motorcycles COEs will drop further and allow more low-end bikes on the road, and frankly, you shouldn’t be riding those unsafe thin-wheeled bikes if you can afford better. They are involved in the majority of bike accidents here partly due to recklessness, partly due to lack of braking power and stability.
(Update 15 Mar : The motorcycle COE has gone up to a record high of $7,483, up about 10% from the previous $6,801. This is the first time it has breached seven grand. So much for ARF tax hike reducing COE prices.)
Myself? To be honest, I have enough savings to afford the tax hike (I’ve worked pretty hard for a long time, folks) if I really want to buy a new bike, but I’m now hugging my Ducati Monster 1200S a little tighter for the next 7 years until the COE expires. Its price has gone up from $38K in 2014 to $53K this week. All because of some civil servant cutting and pasting Excel cells.
It really makes me sad when so many more younger bikers can no longer experience the joy of riding true engineering and aesthetic marvels because the country wants to tax every “luxury” item they deem to be toys of rich people. Or when older riders cannot upgrade to their dream machines they’ve already saved up years for.
The message to bikers is clear : Let them eat cake and ride their cheap-not-cheap kup chais or rattling second-hand 125ccs instead until they’re sent to the scrapyard.
People don’t ponder about the things they don’t know.
Most bikers aren’t rich, but why should you worry for them?
Some motorcycle dealer jobs will be lost, who will shed a tear for them?
The inevitable death of motorcycles in Singapore will also forgotten by the masses, like the faintly disappearing wail of our exhaust pipes.