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Singapore government still studying e-commerce tax: Indranee - Singapore Budget 2018

Ms Indranee, in an interview with MoneyFM 89.3, said there have been countries which started an e-commerce tax and then having to dismantle it because it didn't work out quite well.


WITH less than two weeks to go till the unveiling of Budget 2018 on Feb 19, the government is still studying the best way to implement an e-commerce tax, Senior Minister of State for Law and Finance Indranee Rajah said on Wednesday.

In a 'live' interview with MoneyFM 89.3, the new business radio station, she said: "It's certainly something we would like to do, but we have to be careful about how we do it because we've seen some other countries where they implemented it and then had to dismantle it because it didn't work out quite well. So that is something we are studying carefully."

She added to laughter from the radio DJs: "So keep shopping while you can."

Ms Indranee is partial to a spot of online shopping herself. She told the radio station, which was launched last month, that her last Google search was Asos, the British fashion e-retailer.

Singapore's e-commerce sales are poised to reach S$10 billion by 2020, according to BMI Research.

Finance Minister Heng Swee Keat had said in Budget 2017 that the government was studying ways to tax e-commerce.

Ms Indranee then told Bloomberg in an interview in November last year that e-commerce would likely come under the local tax regime soon, to diversify Singapore's tax base while ensuring a more level playing field between bricks-and-mortar and online businesses.

Some observers have speculated that the Goods and Services tax (GST) will be raised in this year's Budget.

When asked about supporting lower-income households when there is a GST hike, Ms Indranee replied that Singapore's tax system "is designed to be progressive".

Previous hikes to the GST were always accompanied by an offset package to help the less well-off, she said.

"And it's not just offset packages. If you look at our entire system, it's designed in a way that the most needy get help. Take, for example, income tax. The first S$20,000 that you earn is not taxed, and the more you earn, the higher your tax rate."

Young families will continue to be supported in this year's Budget, Ms Indranee added, with pre-school education and support for young children continuing to be a focus.

The Budget will also include measures to build more supportive communities, especially for the elderly, Ms Indranee said.

"What we've done in the last few years is increasing a lot of the spending on the elderly and healthcare. Now is the time to look at community support."

In the last few years, the government introduced the Pioneer Generation Package, the Silver Support Scheme and the Community Health Assistance Scheme, all of which addressed "the monetary aspect", she said.

"But when you look at the elderly, now the question is how do you help them to age in place? You have people whose parents are at home when they go to work, but the parents are elderly and there's the issue of caregiving. What happens when you have a parent who has dementia? What happens when you have someone who is mentally fine but physically infirm and unable to go out?"

She noted that Britain has appointed a new Minister for Loneliness. In a similar vein, the next Budget will seek to give assurances to families with elderly parents that help is available through community support, she said.

"It's zeroing in on a real problem - there are a lot of elderly who are lonely there and it's not dissimilar here. So you have to look at the intangible things and see how you can support and address that."

This year's Budget will also take a "strategic approach" towards jobs, Ms Indranee said.

"Many people think of technology as doing away with jobs, but there's a flip side, which is that technology is creating jobs as well, and it's also revolutionising industries," she noted.

"But in order to access the new jobs and in order to be part of the revolutionised industries, you have to have the capability and ability to deal with technology."

This means helping whole industries to innovate and transform, and helping workers retrain and learn new skills, said Ms Indranee.

"We will continue to support training and help people to switch from one job to another."


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