Users of certain online products, potentially including some apps and content streaming platforms, may have to pay higher prices as the country’s goods and services tax (GST) is extended to imported services – but not to ecommerce transactions, as had been widely expected.
Other measures in today’s government budget announcement that will be of interest to startups include changes to corporation tax and innovation-related spending.
Previously, startups enjoyed a 100 percent corporate tax exemption on the first S$100,000 (US$76,235) of their chargeable income.
The government also wants to help businesses exploit externally developed technologies.
However, a widely anticipated extension of GST to imported goods purchased online – which are distinct from services – is yet to materialize.
In the run up to this year’s budget, many commentators predicted a rise or expansion of GST – which accounts for 15.8 percent of Singapore’s national revenue – to secure greater revenues from the digital economy.