The Singapore Budget has become an annual talking point, with speculations rife leading up to it and opinions aplenty with its announcement every year.
This year’s budget, come 19 February, could be the one of the most controversial yet.
Last year, after both Finance Minister Heng Swee Kiat and PM Lee Hsien Loong admitted that raising taxes ‘is not a matter of whether, but when’, many economists and analysts in Singapore predicted a rise in taxes of all forms, less corporate tax, in the upcoming budget. We have whittled down the list to the most likely, and most pertinent to you.
1. Rise in GST
Let us first address the hot-potato issue: GST. Singapore’s GST rate has remained at 7% since 2007. Compared to neighbouring countries such as Philippines (12%), Indonesia (10%) or Vietnam (10%), Singaporeans are actually comparatively still better off.
When it was introduced in 1994, GST was 3%. It went up to 4% in 2003, then 5% in 2004 and finally 7%. Looking at this trend, it would not be unexpected for a rise in GST after being unchanged for more than a decade.
2. Cryptocurrency Tax
In spite of its volatility
, Bitcoin and other cryptocurrencies remain attractive investments for those interested in building a portfolio in this area, as well as those simply trying to make a quick buck.
Currently, cryptocurrency trading in Singapore is not taxable, as it is not yet classified as a specific type of investment.
However, all this could change soon. Experts have speculated that cryptocurrencies will soon be recognised as a virtual commodity officially in Singapore, given that it is a digital representation of value. When that time comes, investing in cryptocurrencies might be slightly less attractive after all.
3. Online Shopping Tax
Currently, online purchases of less than $400 is not taxable in Singapore. This has a loophole in an of itself, with splitting up online transactions to multiple orders a simple trick used by many.
However, in a bid to further diversify its tax base to the growing e-commerce market, as well as to prevent a further drop in competitiveness of physical shops hit by a GST hike, it is likely some form of taxation would be applied.
Experts have predicted a ‘reverse-charge’ mechanism. Simply put, online suppliers would have to register for GST for each of their products sold, which would indirectly force them to transfer the tax burden to consumers.
Looks like our cheap Taobao and Amazon deals might be slightly harder to come across in the future.
What are your thoughts? Let us know down in the comments below or on our Facebook page