Those sneakers and streetwear you’ve been buying online might cost more in the near future, if new measures for taxes come into effect.
The days of going on an online shopping spree may soon be over, should countries adopt recommendations from the Organization for Economic Co-operation and Development (OECD). Its latest report pushes for online shoppers to pay taxes on their purchases from overseas sites, to mitigate loss of tax revenue and combat base erosion as well as profit shifting.
In the case of Singapore, items bought online by local consumers are currently not subjected to Goods and Services Tax (GST), unless they are dutiable products or cost a total of more than S$400, inclusive of shipping and insurance.
Online shoppers have been known to separate their purchases to avoid paying GST, but that may not be an option anymore if taxes are included for each and every order.
In fact, this may be the reprieve that local businesses need, as many of them are currently experiencing a competitive disadvantage against online merchants.
According to the OECD, as the digital economy expands and takes up a significant portion of the overall economy, drawing a line between them when it comes to tax revenue becomes difficult, if not impossible.
We want to hear your views on this possible major change to online shopping; let us know in the comments below.
Source: Channel News Asia