Singapore: It Will Impose A "Consumption Tax" On Online Shopping.

In 2015, Singapore's online pactions amounted to almost 250 million, and is expected to grow at an annual growth rate of 9%.

Many countries are considering tax on the "digital economy", though it is not easy to implement.

Recent reports show that as more and more people start buying online, some experts suggest that

Goods and Services Tax is used to deal with these pactions, because the annual volume of online shopping market is nearly 500 thousand Singapore dollars.

Because of the difficulty in monitoring online pactions, many Internet services are not taxed.

But this situation may soon change, and tax authorities around the world are paying close attention to this.

Mr Robert Tsang, head of DDT accounting firm in Southeast Asia and Asia Pacific, said: "regarding services, this is a constantly developing and changing field. More and more countries are paying attention to online services, especially game services.

Last year, Japan and South Korea issued special regulations requiring foreign enterprises to become registered taxpayers. If the final customers are the two peoples, they need to pay taxes. "

"Therefore, if a Japanese gambles on the Internet or plays games, it is an American enterprise that provides these services.

Since last October 1st, the US business has to pay a consumption tax for these services. "

"Not only Japan and South Korea are concerned about this, but tax authorities in Australia, New Zealand and a host of other countries are studying how to regulate the tax collection system for online services," he said.

Experts say the tax system is still at a very early stage, and how to effectively implement these systems is also a problem.

Online shopping of low value goods needs to be taxed?

For larger and larger physical products

One suggestion is to cover the physical products that are worth less than 400 Singapore dollars with the new existing tax system.

At present, these low value products online pactions do not need to pay a 7% consumption tax.

Mr Yeo Kai Eng, director of indirect taxes and commodity service tax, said: "the consumption tax came into effect in 1994, when there was a tax exemption rule.

Of course, no one expected the rise of online shopping at that time.

But the situation has changed.

With the rapid development of online shopping, should these low value goods be excused from consumption tax? Because the value is low but the quantity is considerable.

In order to more effectively collect taxes on Internet pactions, experts suggest that the Singapore government can require large business enterprises to collect excise taxes on behalf of them.

The government can also cooperate with express companies to track small retailers' online orders.

Looking ahead, tax experts say that the government may later specialize in acupuncture.

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It is said that with the rapid expansion of the electricity business, the problem of tax collection is not "possible" but "when".