Recent amendments to transport legislation in Singapore will change how motorists are charged and regulated, supporting the rollout of the ERP 2.0 system.

Following projected regulatory changes first announced in January 2026, the Land Transport Authority (LTA) has confirmed that the Road Traffic Act has been amended to enable the transition to ERP 2.0.

The Electronic Road Pricing (ERP) system is an electronic toll collection scheme used in Singapore to manage traffic through road pricing and operates as a usage-based taxation mechanism alongside the purchase-based Certificate of Entitlement system.

Under the revised framework, all Singapore-registered motor vehicles will be required to have the ERP 2.0 system's on-board unit (OBU) installed in order to travel on public roads from 1st January 2027.

From 15th February 2026, vehicle owners who have been invited to install the OBU but have not yet done so will receive a final reminder from the LTA, followed by a three-month period from the date of issuance to complete the installation at no charge.

Failure to comply will result in installation fees of SGD 35 for two-wheelers and SGD 70 (US$ 27.50-55, respectively) for other vehicles.

Unauthorised OBU-related services, including installation, manufacture, modification, repositioning, removal, repair and advertising, will be subject to enforcement action, with serious cases carrying penalties of up to SGD 20,000, imprisonment for a term not exceeding 12 months, or both.

The Ministry of Transport (MOT) and the LTA will also exempt certain vehicles from mandatory OBU installation. Existing Classic or Vintage Vehicle (CVV) owners will have the option to install a free OBU, subject to a technical feasibility assessment.

From 1st January 2027, CVV vehicles without an installed OBU will be subject to a flat-rate ERP fee of SGD 3 for two-wheelers and SGD 10 for all other vehicles for each ERP operational day on which the vehicle travels on Singapore roads.

As previously announced, the LTA will decriminalise missed ERP payments and treat them as an administrative matter. From 1st January 2027, responsibility for settling outstanding ERP charges will rest with vehicle owners rather than drivers.

Vehicle owners who fail to do so within a five-day grace period following an SMS notification from the LTA will be unable to transact with the authority until the outstanding charge and an administrative fee of SGD 10 are paid.

Vehicle owners who do not settle outstanding ERP payments within the grace period will also be denied access to vehicle-related services, including road tax renewal and the use and encashment of Preferential Additional Registration Fee rebates and COE residuals.

The announcement also outlines increased penalties for the illegal alteration of motor vehicles, intended to discourage workshops from allowing such activities on their premises.

Individuals may face fines of up to SGD 20,000, imprisonment for a term not exceeding two years, or both, with penalties doubled for repeat offences.

Non-individual first-time offenders may be fined up to SGD 40,000, with fines rising to SGD 80,000 for repeat offenders.

Penalties for keeping or using unregistered or deregistered vehicles have also been increased. Offenders may be fined up to SGD 20,000 and/or imprisoned for up to two years for a first offence, with penalties doubled for repeat offences.

These revised penalties will take effect from 27th February 2026.