There are many online shoppers here in Singapore. We love to shop online because of its convenience (less queuing time) and its cheapness (some are non-taxable). This is the reason why online stores are a lucrative business. However, we should brace ourselves for some changes.
We have to know that The Organization for Economic Cooperation and Development (OECD) are recommending the governments around the world to outline laws that will levy more taxes on goods online. Though this is still just an idea, online shoppers are not that happy of the news.
Here in Singapore, there is no need for the Goods and Services Tax (GST) especially for imported items sold and bought online by local consumers – as long as it is less than S$400. This is the reason why online shoppers binge shop to avoid paying taxes. GST only applies to dutiable items like vehicles, tobacco and alcohol products.
OECD recommends to levy online shoppers because countries are missing a lot of money from e-commerce transactions. This is OECD’s way of battling tax avoidance. According to OECD, the digital economy is every growing and if the governments do not act now, it will be impossible in the future to fence the digital economy.
Aside from online retail stores, OECD is also recommending the government to levy tax against app stores, online payment services and online advertising. With this, perhaps it would be easier to consider local buying rather than international e-commerce sites.
We will have to wait and see. If the government sees it necessary, they will consider OECD’s recommendations and we cannot do anything but submit to it.