Levy on Singapore cars: 'KL testing system now'

The Straits Times, February 3, 2007


Machines at Second Link and Causeway set up to collect $8.80 fee, says report

By Leslie Lau, MALAYSIA CORRESPONDENT


KUALA LUMPUR - THE Malaysian authorities have installed electronic payment equipment and gantries at the Causeway and Second Link to collect a proposed levy of RM20 (S$8.80) from all Singapore-registered vehicles.
Trial runs of the equipment have started, according to newspaper reports here, even though the Malaysian Cabinet has not yet made a decision on the proposed levy.

'No decision has been made yet,' a senior Malaysian Transport Ministry official told The Straits Times.

'We are still waiting for a Cabinet paper.'

But a report in the New Straits Times yesterday said the equipment had been tested over the past few days, and Customs and immigration officials at both entry points had started verbally informing Singapore motorists about the new levy.

The report quoted unnamed motorists as saying they had been told the levy could be imposed from as early as tomorrow, despite there not having been any official word on it.

There have also been no announcement of other details, such as where such cards can be purchased, even though trials are now in operation.

A Malaysian immigration spokesman here told The Straits Times that his department was not aware of the source of the New Straits Times report.

The installation of the equipment apparently began late last year. According to Iris Corp, the manufacturers of the new gantries and card readers, the company was awarded a contract last year to supply the equipment.

An official said the company began work on the project last month. He said the company was told by the Malaysian government to ensure the equipment was ready for use by Feb 1.

The new equipment is designed to make it easier for Singaporean motorists to use stored value cards to pay the levy.

A levy on Singapore vehicles was first proposed last year by a Malaysian minister to help defray the cost of fuel subsidies.

The levy is aimed at recovering subsidies enjoyed by Singaporean motorists when they top up their petrol tanks in Malaysia. Petrol in the country is sold at an average price of RM1.92 per litre, which is cheaper than in Singapore.

According to an estimate last year, about 40,000 vehicles cross into Malaysia from Singapore each day, and if the RM20 fee was to be imposed, it could raise RM800,000 for the government daily.

But there was much dithering over the decision to proceed with the levy and considerable confusion, with International Trade and Industry Minister Rafidah Aziz and Deputy Home Minister Tan Cha Ho making contradictory statements on the issue.

During a visit to Singapore last August, Datuk Seri Rafidah suggested that the proposal to impose the levy on foreign cars entering Johor was off, but she was contradicted by the Home Minister, who said the Cabinet was still deciding on the issue.

Objections were also raised, especially by Johor businesses, which feared a drop in arrivals from Singapore if such a levy was imposed. Johor state executive councillor Freddie Long reiterated the argument yesterday.

The NST report also said it was estimated that Singaporeans spend an average of RM5 million a day on food, shopping and entertainment in Johor, with many businesses in the state heavily dependent on this trade.

Singapore currently imposes a $20 permit fee on Malaysian-registered cars and a $4 levy on motorcycles entering the Republic from 2am to 5pm on weekdays. No fees are levied on weekends and public holidays.

But Malaysian Tourism Minister Tengku Adnan Tengku Mansor believed the RM20 levy would likely not deter Singaporeans from entering the country.

He said the RM20 was inconsequential when compared with the fuel subsidies enjoyed by Singaporeans.

The Straits Times understands the Transport Ministry is likely to make an official announcement on the levy soon.