Goods and Services Tax (Abbreviation: GST; Chinese: 消费税) in Singapore is a broad-based value added tax levied on import of goods, as well as nearly all supplies of goods and services. The only exemptions are for the sales and leases of residential properties and most financial services. Export of goods and international services are zero-rated.
Singapore's GST was introduced on April 1, 1994, at 3%. It was increased to 4% on 1 January 2003, and to 5% on 1 January 2004. It was increased to its current rate of 7% on 1 July 2007.
Before 1986, Singapore's corporate income tax rate and top marginal personal income tax rate both stood at 40%. Such high rates were deemed to be uncompetitive. On the recommendation of the 1986 Economic Committee, Singapore's government decided that it needed to shift from direct to indirect taxes, in order to maintain its international competitiveness in attracting investments, and to sustain its economic growth in order to create well-paying jobs for Singaporeans.
The GST was part of a larger tax restructuring exercise to enable Singapore to shift its reliance from direct taxes to indirect taxes. The government argued that tax reform was necessary in order to maintain Singapore's competitiveness, in order to sustain long-term growth and job creation. The government also argued that with an ageing population, Singapore’s income tax base was... Read More