Immediate 20% increase in tobacco tax across all tobacco products: Budget 2026

Prime Minister Lawrence Wong announced a 20 per cent increase in tobacco excise duty, across all tobacco products, in his Budget Speech of 2026.

Excise duty refers to duty levied on goods manufactured in, or imported into, Singapore, according to Singapore Customs.

This will take place with effect from today (Feb. 12, 2026).

Car tax

This comes as a part of a slew of tax changes, including the reduction of the Preferential Additional Registration Fee (PARF) rebate by 45 percentage points and lowering of the PARF rebate cap to S$30,000.

PM Wong explained that car buyers are taxed through the additional registration fee to encourage timely renewal of the vehicle population, so it is safer and less pollutive.

There is a Preferential Additional Registration Fee (PARF) rebate for cars deregistered by their 10th year, sized as a percentage of the additional registration fee paid.

With electric vehicles becoming more common, which are less pollutive, the need for early deregistration is reduced.

The PARF rebate will be reduced by 45 percentage points, and the rebate cap will be lowered from S$60,000 to S$30,000.

This will apply to all cars registered with COEs obtained from the next bidding exercise.

Top image from Pixabay.