Singapore’s Land Transport Authority today (Feb 25) announced that Singapore’s road usage tax, the Electronic Road Pricing (ERP), will be taxed and calculated using Global Positioning System (GPS) technology. This will eliminate the need to build physical ERP gantries and enhance tax collection with coverage over the entire island.

The Singapore government can easily charge any congested road with ERP tax at any price they want over the new GPS system by simple programming from a central server. All Singapore vehicles will have their existing ERP in-vehicle unit replaced by the new GPS-tracking on-board unit (OBU). The LTA said that the government will pay for the one-time replacement fee for everyone, in a bid to alleviate public resistance to the new tax collection method.

The new GPS-based ERP contract has just been awarded to Temasek Holdings-linked company National Computer System (NCS) and Japanese conglomerate Mitsubishi Heavy Industries Engine System Asia. The S$556 million development will commence from June this year.

Last year, the Singapore government netted S$152 million in revenue from ERP taxes.