VEP - Does Malaysia fully understand why Singapore charges VEP?
Let's discuss this topic and do share your views. Here are mine,
Statistics from LTA showed that the total population of Singapore in 2013 was 5.399mil (Source: LTA Singapore). Out of 5.399mil, 3.845mil are Residents(Citizens and PRs), the other 1.554mil are Non-Residents(Work Permit holders, Employment Pass holders, S-Pass holders etc). In the same year, the total number of cars(all types) excluding motorcycles is 829,236 (Source: LTA Singapore)
Cars in Singapore are very expensive, the cheapest new car you can get presently is easily more than SGD90k(roughly around RM240k), thanks to the super high import tax of motor vehicles and the piece of ultra expensive 'paper'. To add salt to your wound, you can only drive it for 10 years. In Malaysia, we can get a brand new car at only RM25k, moreover, it doesn't 'expire' in 10 years. Nobody in Singapore will buy a car in Singapore if they are allowed to buy their car in Malaysia and drive it in Singapore. That's why the government of Sg came out with a law which forbids residents of Singapore(Citizens and PRs) from driving a Malaysian registered car in Singapore.
What about Non-Residents of Singapore(Work Permit holders etc as stated above)? Sg cannot just ban these Non-Residents from driving a Malaysia registered car into Sg. But without any control, all those 1.554mil Non-Residents of Singapore who work in Sg will definitely be driving their affordable Malaysia registered cars in Sg(for those who reside in Sg) or driving daily into Sg(for those who reside in Johor and do the daily commute into Sg for work). Now, Sg is a very small island and the government controls the total number of vehicles in this tiny island very tightly. With just 829,236 vehicles in Sg(excluding motorcycles), we are already stuck in traffics jams everyday even during non-peak hours nowadays! If half of those 1.554mil Non-Residents who work in Sg drive their Malaysia registered cars in Sg, it will take us 5 hours just to get from Woodlands East to Woodlands West. Thus, the government of Sg has to solve this problem, and they came up with the idea of charging DAILY VEP in order to make it financially not feasible to drive a Malaysia registered car in Sg daily. Thus, the government can have more control of the car population in Sg.
Most low income workers in Sg have cars in Malaysia. With this daily VEP charge, most workers have no choice but to ride a motorcycle into Sg for work everyday. A small number of Non-resident executives who work in Sg, after doing their detailed calculations, still find it cheaper to buy their cars in Malaysia and pay the daily VEP, than to pay $xxx amount for a Sg car. A friend of mine used to do that and drove his Malaysia registered car in Sg everyday. That's why, the bigger the price gap between Sg cars and Malaysia cars, the higher LTA will adjust the daily VEP amount in order to close up the price gap and make it financially not feasible for Non-residents workers of Singapore to drive their Malaysia registered cars in Sg. Sg recently increased the daily VEP amount because of the recent significant increase in prices of our COE. Guess what, my friend stopped driving his Malaysia car in Sg after the VEP fee increased.
Sg has no choice but to charge VEP but they know full well that any extra charges in this form will surely slow down economic activities, reduce foreign investments from Malaysia, cut down the number of tourists coming into Sg from Malaysia via cars etc. Thus, Sg only charges VEP from Mon - Fri from 2am until 5pm. After 5pm, there will not be any VEP fee. They do not charge VEP on Sat, Sun and public holidays and they give each motorist 10 VEP-FREE days annually. Apart from that, during the Singapore mid-year and year-end school holidays, VEP fees will only apply from 2am – 12pm(instead of 5pm). All these efforts are made to attract more investments and spendings from Malaysians.
The government of Malaysia also knows very well that they should reduce cross-border tolls in order to attract more investments from Sg and to spur economic activities in Iskandar. That was why Malaysia asked Singapore to reduced the 2nd Link tolls together with them some time ago, from a total of around RM50 to around RM35 return trips. But when they saw that Sg increased VEP from $20 to $35, they didn't understand the real reason why Sg did that and some simple minded ones got angry and asked questions like, "Why is it that they can charge us VEP and we cannot charge them? We should just charge them RM100! If we don't charge, it is unfair to us right?". Suddenly, Malaysia has forgotten that reducing cross border cost is the way to attract more investments from Sg. They decided to do the exact opposite - to charge many many times more. They proceeded to increase tolls at Causeway significantly and will start charging RM20 VEP from August.
Malaysia wants residents of Singapore to shift their businesses to Iskandar. Or simply buy a house in Iskandar, live and spend in Iskandar and commute to Sg daily for work. But now, they are discouraging that by charging VEP and increasing toll significantly. How do you encourage someone from Sg to buy a house in Iskandar and commute to Sg daily for work when you charge them VEP everyday they cross border? Monthly instalment for a RM500k-RM600k condo in Medini(special zone not affected by curbs and restrictions) is only around RM2k+ per month but if you commute to Sg 26 days a month, you'll have to pay another RM1430 per month on tolls and VEP and we're not even talking about the long distance travel and the super frustrating daily traffic jams at the CIQ which he/she has to endure. Moreover, such amount is enough for this person to get the smallest condo in Singapore(not HDB). Staying in Sg, he doesn't even need to be stuck at CIQ for hours everyday, and having pulled out all his/her hair by the end of the first year of daily CIQ jams.
This VEP will also make day trippers from Sg cut down on their daily shopping trips into Iskandar. Of course people will still go, but definitely less frequently.
If Malaysia fully understands the reason why Sg charges VEP, they will know that they are not doing themselves any good by doing the same. If it really has to be done, I think they should look into it deeply and fine tune it. For e.g. Foreigners who invest in Iskandar(whether starting a business or buying a property) are helping the economy of Iskandar. Maybe the government of Malaysia can consider giving 'VEP-FREE-PASS' to such a foreigner who supports the Iskandar economy in such a way. By doing this, at least you're taking away the factor which discourages/deters investments from Singapore from those who want/plan to invest in Iskandar.
It's getting late and I'm going to sleep now. By the way, I'm not working for any government agencies and these are just my personal observation. I might be wrong, do share your opinion about this. Let's discuss VEP.
Let's discuss this topic and do share your views. Here are mine,
Statistics from LTA showed that the total population of Singapore in 2013 was 5.399mil (Source: LTA Singapore). Out of 5.399mil, 3.845mil are Residents(Citizens and PRs), the other 1.554mil are Non-Residents(Work Permit holders, Employment Pass holders, S-Pass holders etc). In the same year, the total number of cars(all types) excluding motorcycles is 829,236 (Source: LTA Singapore)
Cars in Singapore are very expensive, the cheapest new car you can get presently is easily more than SGD90k(roughly around RM240k), thanks to the super high import tax of motor vehicles and the piece of ultra expensive 'paper'. To add salt to your wound, you can only drive it for 10 years. In Malaysia, we can get a brand new car at only RM25k, moreover, it doesn't 'expire' in 10 years. Nobody in Singapore will buy a car in Singapore if they are allowed to buy their car in Malaysia and drive it in Singapore. That's why the government of Sg came out with a law which forbids residents of Singapore(Citizens and PRs) from driving a Malaysian registered car in Singapore.
What about Non-Residents of Singapore(Work Permit holders etc as stated above)? Sg cannot just ban these Non-Residents from driving a Malaysia registered car into Sg. But without any control, all those 1.554mil Non-Residents of Singapore who work in Sg will definitely be driving their affordable Malaysia registered cars in Sg(for those who reside in Sg) or driving daily into Sg(for those who reside in Johor and do the daily commute into Sg for work). Now, Sg is a very small island and the government controls the total number of vehicles in this tiny island very tightly. With just 829,236 vehicles in Sg(excluding motorcycles), we are already stuck in traffics jams everyday even during non-peak hours nowadays! If half of those 1.554mil Non-Residents who work in Sg drive their Malaysia registered cars in Sg, it will take us 5 hours just to get from Woodlands East to Woodlands West. Thus, the government of Sg has to solve this problem, and they came up with the idea of charging DAILY VEP in order to make it financially not feasible to drive a Malaysia registered car in Sg daily. Thus, the government can have more control of the car population in Sg.
Most low income workers in Sg have cars in Malaysia. With this daily VEP charge, most workers have no choice but to ride a motorcycle into Sg for work everyday. A small number of Non-resident executives who work in Sg, after doing their detailed calculations, still find it cheaper to buy their cars in Malaysia and pay the daily VEP, than to pay $xxx amount for a Sg car. A friend of mine used to do that and drove his Malaysia registered car in Sg everyday. That's why, the bigger the price gap between Sg cars and Malaysia cars, the higher LTA will adjust the daily VEP amount in order to close up the price gap and make it financially not feasible for Non-residents workers of Singapore to drive their Malaysia registered cars in Sg. Sg recently increased the daily VEP amount because of the recent significant increase in prices of our COE. Guess what, my friend stopped driving his Malaysia car in Sg after the VEP fee increased.
Sg has no choice but to charge VEP but they know full well that any extra charges in this form will surely slow down economic activities, reduce foreign investments from Malaysia, cut down the number of tourists coming into Sg from Malaysia via cars etc. Thus, Sg only charges VEP from Mon - Fri from 2am until 5pm. After 5pm, there will not be any VEP fee. They do not charge VEP on Sat, Sun and public holidays and they give each motorist 10 VEP-FREE days annually. Apart from that, during the Singapore mid-year and year-end school holidays, VEP fees will only apply from 2am – 12pm(instead of 5pm). All these efforts are made to attract more investments and spendings from Malaysians.
The government of Malaysia also knows very well that they should reduce cross-border tolls in order to attract more investments from Sg and to spur economic activities in Iskandar. That was why Malaysia asked Singapore to reduced the 2nd Link tolls together with them some time ago, from a total of around RM50 to around RM35 return trips. But when they saw that Sg increased VEP from $20 to $35, they didn't understand the real reason why Sg did that and some simple minded ones got angry and asked questions like, "Why is it that they can charge us VEP and we cannot charge them? We should just charge them RM100! If we don't charge, it is unfair to us right?". Suddenly, Malaysia has forgotten that reducing cross border cost is the way to attract more investments from Sg. They decided to do the exact opposite - to charge many many times more. They proceeded to increase tolls at Causeway significantly and will start charging RM20 VEP from August.
Malaysia wants residents of Singapore to shift their businesses to Iskandar. Or simply buy a house in Iskandar, live and spend in Iskandar and commute to Sg daily for work. But now, they are discouraging that by charging VEP and increasing toll significantly. How do you encourage someone from Sg to buy a house in Iskandar and commute to Sg daily for work when you charge them VEP everyday they cross border? Monthly instalment for a RM500k-RM600k condo in Medini(special zone not affected by curbs and restrictions) is only around RM2k+ per month but if you commute to Sg 26 days a month, you'll have to pay another RM1430 per month on tolls and VEP and we're not even talking about the long distance travel and the super frustrating daily traffic jams at the CIQ which he/she has to endure. Moreover, such amount is enough for this person to get the smallest condo in Singapore(not HDB). Staying in Sg, he doesn't even need to be stuck at CIQ for hours everyday, and having pulled out all his/her hair by the end of the first year of daily CIQ jams.
This VEP will also make day trippers from Sg cut down on their daily shopping trips into Iskandar. Of course people will still go, but definitely less frequently.
If Malaysia fully understands the reason why Sg charges VEP, they will know that they are not doing themselves any good by doing the same. If it really has to be done, I think they should look into it deeply and fine tune it. For e.g. Foreigners who invest in Iskandar(whether starting a business or buying a property) are helping the economy of Iskandar. Maybe the government of Malaysia can consider giving 'VEP-FREE-PASS' to such a foreigner who supports the Iskandar economy in such a way. By doing this, at least you're taking away the factor which discourages/deters investments from Singapore from those who want/plan to invest in Iskandar.
It's getting late and I'm going to sleep now. By the way, I'm not working for any government agencies and these are just my personal observation. I might be wrong, do share your opinion about this. Let's discuss VEP.
