The Singapore public is alarmed and angry that the Malaysian government wants to extract more cash from each Singaporean vehicle crossing the causeway, by implementing the Vehicle Entry Permit (VEP) scheme.
Trade associations in Singapore say the move might increase costs for companies which have dealings or operations in Malaysia.
Malaysia has proposed a fee of about RM$20, or S$8 for Singapore-registered vehicles entering the state via the Causeway and the Second Link.
Deputy Transport Minister Datuk Aziz Kaprawisaid the VEP would only be implemented on the country’s southern border and would only involve Singapore-registered vehicles.
Malaysia’s decision follows Singapore’s announcement earlier this month that it would raise its VEP fee for foreign-registered cars to S$35 from S$20 from August.
Singapore also announced that the fee for foreign-registered goods vehicles would also be raised from S$10 (RM$26) to S$40 (RM$103).
Malaysian businesses have protested the move. They say it will drive costs higher, especially with the strong Singapore dollar.