SINGAPORE: The Goods and Services Tax (GST) will be imposed on imported low-value goods from 2023, Deputy Prime Minister Heng Swee Keat said in his Budget speech on Tuesday (Feb 16).
This will apply to goods imported via air or post that are valued up to and including the current GST import relief threshold of S$400. These goods are currently not subject to GST to facilitate clearance at the border.
GST will also be imposed on business-to-consumer (B2C) imported non-digital services, which refer to services supplied over the Internet or other electronic networks that require human intervention.
This includes live interactions with overseas providers of educational learning, fitness training, counselling and telemedicine.
The changes will “ensure a level playing field for our local businesses to compete effectively”, Mr Heng said on Tuesday, noting that this is one aspect of a fair and resilient tax system.
The changes are also being introduced against the backdrop of the growing popularity of online shopping, including from overseas suppliers.
They come after GST was extended to imported digital services like movie and music streaming services from 2020, amid a growing digital economy and e-commerce for goods and services.
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Mr Heng, who is also the Finance Minister, pointed out that several jurisdictions, including Australia, New Zealand and the European Union, have implemented or announced plans to implement the equivalent of GST on such goods.
“Overseas suppliers of goods and services will be subject to the same GST treatment as local suppliers,” he added.
“IRAS (Inland Revenue Authority of Singapore) will continue to work with the industry to ensure smooth implementation for the change.”
HOW WILL THE CHANGES TAKE PLACE?
Overseas suppliers of imported low-value goods and imported non-digital services will have to register under the extended overseas vendor registration regime to charge GST on such sales to local consumers.
“Overseas suppliers, electronic marketplace operators and redeliverers will be required to register for GST if they make significant supplies of low-value goods to local consumers,” the Ministry of Finance (MOF) said in a factsheet on Tuesday.
“They will collect GST on the sale of low-value goods imported by local consumers, and then pay the GST to IRAS.”
MOF said IRAS will consult the industry “shortly” before finalising implementation details.
“The change will take effect from Jan 1, 2023, to allow time for businesses to prepare for implementation.”