Singapore customers may soon have to pay GST for items bought online

Singapore is expected to levy the goods and services tax (GST) on products sold online soon, after a senior minister indicated the possibility in a recent interview.

Senior Minister of State for Law and Finance Indranee Rajah had said in an interview with Bloomberg that Singapore was looking to further diversify its tax base via areas such as e-commerce.

“You can imagine, 20 years from now, the way people purchase is very different and by that time online platforms will be mainstays, so if that’s not part of the tax regime, there’s going to be a lot of holes there,” she was quoted as saying.

Most online purchases are currently taxed only if they exceed S$400.

Earlier this year, Finance Minister Heng Swee Keat also said that the Government was considering implementing tax on e-commerce purchases.

If GST is levied on online purchases, e-commerce platforms might be required to register for GST to sell to Singapore consumers, The Business Times reported.

Alternatively, consumers could be required to pay the GST on their purchases instead.

During her interview, Ms Rajah also elaborated on statements the Prime Minister had made about increasing taxes earlier this week.

Citing increased social spending and investment needs, Prime Minister Lee said during a speech on Nov 19 that “raising taxes is not a matter of whether, but when”.

In a video published by Bloomberg, Ms Rajah said: “We take a lot of effort to make sure that on the one hand, we are competitive; (and) on the other hand, we have enough revenue to do what we need to do; and (thirdly), that we’re sustainable.”

She said that while there have been good results from economic transformation policies and growth has gone up, social spending has also increased in recent years.

“We’ve introduced a great number of social support measures. We’ve been using that money wisely and prudently. But we’ve also, looking ahead, we’re seeing needs for infrastructure spending, for spending on an ageing population. So we’re going to have to obviously think of ways of how to fund that,” she added.