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Singapore might tax US$37.7bn online shopping boom

Singapore might tax US$37.7bn online shopping boom

SINGAPORE: Singapore might introduce an e-commerce tax in next week’s budget, setting the tone for a region that is grappling with online retail’s assault on brick-and-mortar vendors. Eight of the 12 economists in a Bloomberg survey said the budget, to be released on Monday next week, would contain a new tax on online vendors, with another betting that cross-border digital transactions would be included in the goods-and-services tax regime. BMI Research projected that Southeast Asia’s six biggest economies would boost e-commerce to US$64.8 billion in 2021 from US$37.7 billion last year. An e-commerce tax would ease “the competition for offline retailers that have been struggling amid the rising popularity of online shopping,” BMI Research consumer analyst Nainika Singh said by e-mail. While Singaporean government officials have been tight-lipped about specific plans in the upcoming budget, they have cited an urgent need to get organized about the taxation of online merchants.

Online shoppers in Singapore are generally able to avoid levies on purchases that do not exceed S$400 (US$300), but given how quickly the industry has transformed, a tax change should have been made on this front “probably yesterday,” Singaporean Senior Minister of State for Law and Finance Indranee Rajah said in November last year.