Asia: GST upsurge in Singapore starting 2021

Following the annual Budget 2018 speech, Singapore Finance Minister recently announced the increase of Goods and Service Tax (GST) in Singapore from 7% to 9%, which will be implemented gradually from 2021 to 2025.

Apart from an increase in GST, the minister also announced tax increases in other sectors such as on tax imposed on tobacco products, carbon emission, and imported goods cost below SGD 400. The government will also be imposing the tax on imported services from companies which do not have the presence in Singapore, while the GST will not be applied to e-commerce goods such as online shopping.

The tax reform will impact businesses in the country. Businesses which use imported services to make taxable supplies of goods and services can apply for full GST refund, while businesses which use imported services to make non-taxable goods and services can only apply for partial GST refund.

According to RFi Group data, there has been a negative sentiment among the banked population in Singapore, with more customers concerned with their financial situation compared to a year ago. The GST hike will likely impact this negative sentiment further.

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