LTA slashes PARF rebate cap to $30,000 amidst EV push

The rebate cap encourages safety and pollution control.

The Land Transport Authority (LTA) has released the Preferential Additional Registration Fee (PARF) rebate schedule and cap for cars and taxis, halving the cap from $60,000 to $30,000 to encourage timely vehicle renewal for safety and pollution control.

This comes amidst the growing adoption of electric vehicles (EVs) in Singapore, which the agency noted, reduces the need for early deregistration incentives under the PARF system.

Under the updated schedule, a vehicle deregistered at five years or younger receives a rebate of 30% of the ARF paid. The rebate decreases with vehicle age, falling to 5% for vehicles aged nine to 10 years.

Previously, rebates ranged from 75% to 50% for the same age categories.

The revised cap and percentages apply to cars registered with Certificates of Entitlement (COEs) from the second bidding exercise in February 2026. For taxis and COE‑exempt vehicles, the changes take effect for registrations on or after 13 February, the LTA said.

The revision excludes vehicles ineligible for PARF rebates, including goods‑cum‑passenger vehicles, classic cars, vintage cars, and laid‑up vehicles.

The announcement follows remarks by Lawrence Wong, Prime Minister and Minister for Finance, on the PARF system revisions during the Singapore Budget 2026 Statement.

Desmond Teo, Asean EY Private Tax Leader, weighed in, saying that the system could unintentionally increase the taxation of wealth via the vehicle ownership.

“Whilst the proposed reduction of the PARF rebate by 45% and the PARF rebate cap to $30,000 reflects the less pollutive nature of electric vehicles, this could have an unintended impact of increasing the taxation of wealth via the vehicle ownership," the expert said.