Parliamentary Replies

Date: 9 April 2012

To ask the Deputy Prime Minister and Minister for Finance:

(a) whether the Ministry will consider exempting investment-grade gold bars from GST when sold by local jewellers to retail customers; and (b) whether IRAS is taking steps to monitor the online sales of gold bars which may not have been tested or accredited by approved test laboratories.

Reply by DPM and Finance Minister Tharman Shanmugaratnam:

1. Investment–grade gold is essentially a financial asset that is actively traded in international exchanges, just like other financial instruments such as stocks and bonds that do not attract GST. Exempting investment-grade gold from GST brings our GST treatment of investment-grade gold in line with the practices of developed economies like Australia, UK and Switzerland. This will facilitate the development of gold trading, which can draw on Singapore’s strengths as an international financial centre and trading hub, to meet strong demand for investment-grade gold in Asia.

2. The GST exemption does not depend on who the buyer and seller are. What matters is that the gold must meet the prescribed definition and attributes of “investment-grade”, and be produced by accredited refineries. The prescribed definition ensures that the gold is indeed of investment-grade quality and be readily accepted for settlement by international exchanges.

3. The GST exemption does not therefore extend to retail sale of gold products like gold jewellery and collector’s gold coins.

4. There will be safeguards and enforcement by the Comptroller of GST to ensure that GST exemption is only on sale of investment-grade gold that meet the prescribed definition, whether online or otherwise.