The dawn of taxation in the digital economy

THE retail sector is a major contributor to the growth of Singapore's economy but the rise of e-commerce, dominated mainly by overseas retailers, has resulted in more money flowing out of the country. As many of the largest online retailers are located outside of Singapore, the products and services escape Singapore domestic GST, and often the goods they sell are brought into the country without any import GST being due.

Figures from the IRAS (Inland Revenue Authority of Singapore) show that the collection of Goods and Services Tax (GST) in Singapore in the financial year ended March 31, 2016 amounted to S$10.3 billion. This represents a modest increase of S$0.1 billion from …