Online shoppers, you better hustle and take advantage of tomorrow’s Black Friday sales to make all your necessary buys before the government levies goods and services tax (GST) on e-commerce purchases.
According to experts, the government is looking to diversify its tax base, especially after Senior Minister of State for Law and Finance Indranee Rajah mentioned in a Bloomberg interview on Tuesday that e-commerce will likely be included in the local tax regime soon.
“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 said.
The Straits Times reported that this could either result in the big e-tailers registering for GST here, or customers forking out extra to pay tax on their online purchases. They’re not letting anything pass — even purchases made through digital services like Spotify, iTunes and Kindle eBooks could be dragged into the GST net. Aw, crap.
During this year’s Budget, Finance Minister Heng Swee Keat also mentioned the government’s interest in taxing e-commerce.
One of the reasons the government has given is the intention to even the playing fields between local GST-registered retailers and overseas sellers. While there are numerous models for imposing GST on international transactions, it seems that most countries are using the vendor collection model, which requires overseas vendors to register for GST and to collect and account for GST on sales to local consumers.
As of now, online purchases of goods and services under S$400 in Singapore are not taxed, but this limit could possibly be reviewed as well.
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