Singapore's goods and services tax

• Main Authors: Hwee, Chia Geok, Mui, Chua Siao, Phuay, Lian Gek
• Other Authors: Nanyang Business School
• Format: Final Year Project
• Language: English
• Published: 2014
• Subjects: DRNTU::Business
• Online Access: http://hdl.handle.net/10356/55529
• Institution: Nanyang Technological University

The Goods and Services Tax (GST) is implemented in Singapore on 1 April 1994. The GST is charged at a single low rate of 3% and it applies to almost all goods and services. The government has no intention of changing this GST rate for at least five years after full implementation of the GST. The current GST system shifts the tax incidence away from income-based to consumption-based system. It is a modified version of similar Value-Added Tax systems in other countries. Thus, its impacts on Singapore are expected to be different from these countries. A comparison of the GST system between Singapore and its closely modelled counterpart - New Zealand, is made and the Singapore system is found to be more complex than the New Zealand GST system. This is due to certain unique features that exist in Singapore. The objective of this report is to study the post-implementation effects of GST in Singapore. GST has a once and for all impact on general price level. GST also promotes capital formation and growth, and the competitiveness of domestically produced goods. Nevertheless, it also increases administrative costs with regard to the collection of GST revenue. Due to the retail slump, particular reference is made to the retail industry to examme whether GST will further aggravate the competitive retail environment. GST has no or minimal impact on retail prices. GST is found to have insignificant impact on the sales and profit margin ofthe retail industry. Lastly, a case analysis on a company within the retail sector is conducted to analyse the impacts and related problems of GST. This is discussed in particular to the three implementation phases of GST -implementation as well as the three departments most affected by the new tax system.