Singapore is considering modifying its Goods and Services Tax (GST) to put at a level playing field local businesses which are registered, and foreign-based ones which are not, a Singapore tax official said August 17.
Speaking at the SMU-TA Centre for Excellence in Taxation Conference, Indranee Rajah, Senior Minister of State for Law and Finance, said that digitization of the economy is causing nations to reconsider their taxation models.
“Digitization is blurring the boundaries between what we consider to be the ‘traditional’ economy and the ‘digital’ economy. For example, brick-and-mortar businesses are increasingly selling digitally. It used to be that you had to go to New York if you wanted to buy something from Macy’s. Now you can order items from them online,” Rajah said.
In formulating a new tax policies to address the digital economy, Singapore will adhere to three principles, Rajah said, namely, tax certainty for businesses, tax neutrality between traditional and digital business models, and international consensus.
Tax policies should minimize the regulatory and compliance burden and rules should not be so onerous as to stifle innovation and growth, she said.
Singapore is also committed to providing a stable business environment by upholding international principles and participating in international efforts, Rajah said.
“We are fully cognizant of the fact that businesses ultimately bear the cost of new tax rules, and hence, it is important for the government to consult and engage businesses wherever possible,” she said.
