Singapore Budget 2018: GST to apply to digital services from 2020

Singapore Budget 2018: GST to apply to digital services from 2020

Over the next five years, the Government expects carbon tax revenue to total almost $1 billion.

Singaporeans will be paying more on the goods and services tax (GST) in the coming years, Finance Minister Heng Swee Keat confirmed during his Budget speech on Monday (Feb 19).

The tax rate will start in 2019 at S$5 (US$3.79) a tonne, before then ramping up after 2023 with the aim of hitting S$10-s$15 (US$7.50-$11.37) by 2030.

Pointing to last year's focus on helping local businesses with their digital transformation, Heng said the government was assessing, alongside the Singapore Business Federation and other industry partners, the development of a national e-invoicing framework.

United Overseas Bank economist Francis Tan expects an overall surplus of $3.1 billion for FY2017, compared with the official initial estimate of $1.91 billion.

They account for around 80% of the nation's emissions.

With regards to online retail, Mr Heng commented that global discussions are ongoing to see how taxes could be applied.

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The bonus, which will cost the Government $700 million, comes from this year's Budget surplus of $9.6 billion.

Mr Heng also noted that the authorities expect to collect a carbon tax revenue of nearly S$1 billion over the first five years.

"I urge companies to do their part for a higher quality living environment for all by putting in meritorious proposals for emissions abatement and energy efficiency", he said, "There will also be new opportunities in areas like sustainable energy and clean technology".

Singapore raised the stamp duty on residential property purchases and flagged future tax increases as it prepared to meet increasing healthcare, infrastructure and security and education needs over the next decade.

The move is aimed at making tax system in Singapore "fair and resilient" in today's digital economy, said Heng.

He stressed that the carbon tax will not be imposed on petrol, diesel and compressed natural gas as excise duties already encourage the reduction of the use of these fuels.

The decision to raise the GST to 9 per cent was widely expected, but the curveball announcement that the change would be stayed until "sometime" between 2021 and 2025 drew praise from observers for being politically astute.

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