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SG Budget Reactions: GST imposition on digital transactions, cross-border trade
THE Singapore government is studying how it can impose the Goods and Services Tax (GST) on digital transactions and cross-border trade.
In his Budget speech on Monday, Finance Minister Heng Swee Keat said some countries have taken steps to adjust their GST system on these transactions and trade to ensure a level playing field between their local businesses which are GST-registered, and foreign-based ones which are not.
Here are some expert comments:
Lam Kok Shang, Head of Indirect Tax at KPMG in Singapore
"The Singapore GST rate at 7 per cent is low compared to the average rate in Asia Pacific. The last rate increase was in 2007. A progressive increase in the Singapore GST rate is consistent with the rationale for introducing the tax in 1994, to encourage entrepreneurship and support foreign direct investments.
"The proposal to study the imposition of GST on imported digitised services in Singapore is consistent with the OECD recommendations. This is to create a level playing field for local businesses supplying digitised services vis-a-vis overseas businesses which are not GST registered."
Richard Mackender, tax partner and indirect tax leader, Deloitte Singapore and Southeast Asia:
"Looks like the government may well join countries such as Australia and New Zealand in applying GST on cross border downloads of digital services such as music and games.
The government is also looking more widely to address the need to maintain a wide tax base - GST rate rise may not be that many years away after all."
For more Budget 2017 stories visit bt.sg/budget17