Submitted by farhan on Wed, 07/10/2015 - 11:04am
According to recommendations by
the Organization for Economic Cooperation and Development (OECD),
governments should do more to collect taxes on goods that consumers
order from overseas websites in the future. This in turn would lead
to consumers being levied with higher taxes for purchased
goods.
In Singapore, consumers do not
need to pay Goods and Services Tax for imported items bought
online, except for dutiable products, if the costs of the products
(including insurance and freight) do not exceed $400. This has led
online shoppers to spread out their purchases where possible to
avoid paying taxes.
Explaining its recommendations,
the OECD wrote: “The collection of VAT or goods and services tax
(GST) on cross-border transactions, particularly those between
businesses and consumers, is an important issue. Countries are thus
recommended to apply the principles of the international VAT or GST
guidelines and consider the introduction of the collection
mechanisms included therein... This issue is particularly acute in
the online business-to-consumer market, and greatly affects the
level playing field between domestic and cross-border
suppliers.”
According to data from Spire
Research and Consulting, of the estimated S$4.5 billion generated
in e-commerce revenue in Singapore in 2013, about 55 per cent
involved cross-border transactions. For Singapore, this means an
estimated tax revenue impact of S$100 million to S$175 million for
that year.
The retail sector is a major
contributor to Singapore’s economy and the rise of e-commerce
—overwhelmingly dominated by overseas merchants — has resulted in
more money flowing out of the country as well as a loss of tax
revenue. Local businesses are also placed at a competitive
disadvantage.
Overseas online retailers are not
taxed here on their income generated from Singapore consumers.
However, local brick-and-mortar stores and businesses have to pay
income tax on revenue earned.
- See more at:
http://www.allsingaporestuff.com/article/online-shoppers-may-be-forced-pay-gst-purchases#sthash.AHcmtg86.dpuf
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Thanks to 69.9% daft selfish idiots.
