Ravenous for a slice of that sweet digital pie, the Singapore government wants to implement Goods and Services Tax (GST) on online services. This, on top of the plan to raise GST on everything else from the current 7 percent to 9 percent sometime between 2021 to 2025.
What this means is that you’ll soon be paying more for streaming platforms like Netflix, Spotify, Amazon Prime Video, and other similar services that you’re subscribed to. The tax will also hit things such as online software purchases (app store buys, video games on Steam, etc) and quite possibly, services involving the burgeoning cryptocurrency business. Bitcoin’s about to get a bit more expensive than it is then.
According to the Budget statement made by Finance Minister Heng Swee Keat yesterday, the GST on digital services will kick in on Jan 1, 2020, so we have a little less than two years to enjoy tax-free online subscriptions.
“With the advent of technology and digital economy, it has become increasingly common for services consumed in Singapore to be obtained from overseas suppliers, which are able to deliver such services without a presence in Singapore,” the Ministry of Finance (MOF) said.
“Introducing GST on imported services will ensure that, irrespective of whether the service consumed in Singapore is bought from suppliers here or from suppliers abroad, the same GST treatment will apply.”
For now at least, taxes won’t hit overseas e-commerce, so all your planned purchases on Taobao and Amazon are safe for the moment. Currently, GST is not levied on imported goods valued below S$400.
But nothing good lasts forever, it seems — MOF mentioned that it would discuss whether to impose taxes on low-value imported goods. Eventually, it will, once the government figures out how to fine-tune GST for lower-value online purchases.
So yeah, shop and subscribe online all you can before the GST kicks in.
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