1. As announced by the Minister for Finance, Mr. Tharman Shanmugaratnam, in his FY2008 Budget Statement, the special tax for Euro-IV diesel cars will be revised with effect from 1st July 2008. Instead of the current four times of road tax, the annual special tax for a Euro-IV diesel car will be computed based on $1.25 per cubic centimetres (cc) of engine capacity, subject to a minimum annual payment of $1,250.
   
   
2. The revision to the special tax structure for Euro-IV diesel cars is made in recognition of the improved emissions of Euro-IV diesel cars with respect to both particulate matters¹ (PM) and carbon dioxide, and the fuel efficiency of diesel engines. The new special tax structure seeks to narrow the difference in the cost of fuel consumption (including petrol duty²) between a Euro-IV diesel car and a petrol car.
   
   
3. Payment of the special tax is made together with the road tax, and owners can choose to pay for the special tax annually or 6-monthly. The revised special tax for Euro-IV diesel cars will result in savings to owners. Examples of savings based on 6-monthly payment of the new special tax are shown in the table below (for the comparison, the current special tax is computed based on road tax after the 15% reduction, which is also effective from 1st July 2008):

4. The special tax for diesel taxis and non Euro-IV diesel cars will remain unchanged. The special tax for taxis remains at $5,100 per annum, and at this amount, it is still a discount considering the much higher annual mileage of a taxi compared to a car³. The special tax of non Euro-IV diesel cars remains at 6 times of road tax, as non Euro-IV diesel cars emit significantly more fine particles than Euro-IV diesel cars
   
   

¹PM emissions from diesel cars have an adverse impact on human health.

²The petrol duty is levied on petrol bought at the pump, while diesel is not subjected to any diesel tax.  For intermediate grade petrol, the petrol duty levied is currently $0.41 cents per litre.

³The average annual mileage of a taxi is about 150,000km, while that of a car is about 21,000km.