PSA YouTroopers: Singapore Budget 2021 just announced that all overseas online shopping, imported either by air or post, will be charged with GST.
If you’ve been shopping online and buying your favourite hauls cheaper from Amazon, Taobao, iHerb, Cult Beauty, and the likes from other overseas stores – head’s up! Things are about to change. In Budget 2021 on Tuesday (February 16), Deputy Prime Minister Heng Swee Keat announced that all low-value goods imported by air or post will now be subjected to goods and services tax (GST).
Ultimate YouTrip Guide To Budget 2021:
- Budget 2021: GST will be charged on all overseas online shopping from Jan 2023
- Budget 2021 Summary: What Travellers & Shoppers Need To Know
Budget 2021: What import taxes are we paying now?
Only overseas goods imported by air or post are subjected to GST
Currently, shoppers are subjected to GST only if their total value of goods hits above S$400. This arrangement not only allows for a speedier clearance process at customs – so that our anticipated loots reach us much earlier – but it has also allowed international shoppers like us to enjoy significant savings (on top of avoiding foreign currency fees with YouTrip).
Oh and remember that painful price hike of S$1 – S$3 that we had to ensure for our Netflix subscription? Ouch.
Imported digital services have been subjected to GST since Jan 1, 2020
Consumers, like you and I, have already been paying for GST on our favourite imported digital services, such as:
This will include all other downloadable digital content, software programmes, cloud services, video and music streaming services, and other subscription-based media. This tax is only applicable to companies with “a yearly global turnover of more than S$1 million that sell more than S$100,000 worth of digital services to customers in Singapore”.
Budget 2021: GST to be applied to all overseas imported goods
Based on the recent Budget 2021 presented, here are the major changes that’ll be affecting everyone who shops online from Jan 1, 2023.
What’s Coming: GST will be taxed on all low-value goods imported by air or post
From Jan 1, 2023, all low-value goods imported by air or post will be subjected to GST.
Remember the times we would avoid hitting the S$400 mark in our combined shopping cart value so that we can avoid paying taxes to the government? That’s not going to cut it soon.
Regardless of value, the government announced that all imported shopping goods will have to be charged with GST. This will mean that shopping from Taobao, Amazon, iHerb, ASOS, eBay, and our endless list of favourite overseas merchants, will soon get a little bit more expensive not because of the increase in their prices, but because of the duties and taxes that we’ll have to pay in Singapore.
Bringing this closer to home, this change will potentially affect the current low prices that we enjoy with our local marketplaces, such as Carousell, Shopee, and Lazada. Both local resellers and overseas suppliers aplenty on these platforms will be subjected to GST when they import to Singapore. As a result, we can probably expect an increase in product prices as local and overseas suppliers manage the increasing costs.
What’s Coming: GST will be taxed on non-digital B2C services
On top of the current taxed digital services, non-digital Business-to-Consumer (B2C) services will also be charged GST. This includes all internet services and facilities that require human intervention, such as fitness training, telemedicine, counselling, and educational offerings.
What’s next for us with this GST announcement?
While no clear implementation method has been shared yet, Deputy Prime Minister Heng Swee Keat announced that the purpose of this is to level the playing field for local businesses to compete effectively.
We know that an increase in GST will happen soon, it’s just officially “sooner rather than later”.
Regardless, we’ll be keeping an eye out for how this will affect us as international shoppers. Bookmark this page for future updates.
Shop GST-free while it lasts with YouTrip
Psst, if you’re still not on YouTrip yet, quickly take advantage of competitive exchange rates that comes when you spend with YouTrip on all your overseas online shopping. With zero fees, and wholesale exchange rates offered, now’s the time to enjoy taxless international shopping before 2023 hits us – hard.
If you don’t have a YouTrip card yet, use <BLOG5> during your sign-up to enjoy a free S$5 in your account! 😎
*Top banner Budget 2021 logo from MOF