In a twist to passing off used cars as new, some importers in Singapore are declaring new cars as old to benefit from a revised ruling leading to lower taxes on imported second-hand vehicles, news reports said on Wednesday, the dpa reported.
The Land Transport Authority (LTA) lifted a barrier on imported used cars last September in ruling such vehicles are eligible for a scrap rebate.
The rebate, paid by the government to the owner if he scraps the car before its tenth year, can amount to several hundred thousand dollars for some cars, The Straits Times said.
Of the 60 imported used cars sold since September and many more on sale currently, industry sources told the newspaper some are in showroom condition but declared "used" to attract lower open market value.
Determined by customs, lower open market value (OMV) is the rate on which taxes are based. The lower a car's OMV, the less tax it attracts.
These importers are able to sell such cars for less and still enjoy a healthy profit. They reportedly focus on high-end models.
Authorized agents complain that they are losing ground. "It's beyond our control," Karsono Kwee was quoted as saying. "We can't compete with them because our OMVs are much higher."
An importer said some of the OMVs of these so-called used cars are less than half the OMVs of a new car.