Goods and Services Tax

What is GST?

Goods and Services Tax (GST) is a tax that is paid on goods or services consumed domestically, including imports.

GST is a multi-stage tax that is collected at each stage of the production and distribution chain.

Output GST - the GST that a GST-registered business charges on its local supplies of goods and services. Output GST is collected by the business on behalf of the Government.
Input GST - the GST that a GST-registered business pays on its purchases of goods and services for business purposes.

To determine the net amount of GST payable by or refundable to the GST-registered business in a given period, the input tax paid is deducted from the output tax collected in that period.

What does GST apply to?

GST is levied on:

a) goods and services supplied in Singapore by GST-registered persons;

b) goods imported into Singapore (unless these goods are exempted from GST e.g. investment precious metals or are granted import relief); and

c) Imported services procured from overseas suppliers. With effect from 1 January 2020, GST is chargeable on business-to-consumer (“B2C”) imported digital services under the overseas vendor registration regime and business-to-business (“B2B”) imported services by way of a reverse charge.

In general, a supply of goods and services is either taxable or exempt.

Taxable goods and services

A taxable supply is one that is standard-rated or zero-rated.

Standard-rated supply - GST is chargeable at 9%.
Zero-rated supply - GST is applied at 0% for the transaction. A GST-registered person charges GST at 0% on his zero-rated supplies, but he can claim the GST paid on his purchases to make those supplies. In Singapore, only exports of goods and international services are zero-rated.

Exempt goods and services

No GST is levied on a supply that is exempt from GST.

Exempt supply – A GST-registered person does not charge any GST on his exempt supplies and generally cannot claim the GST incurred on goods or services used to make the exempt supplies. In Singapore, the sale and lease of residential properties, financial services, investment precious metals, and digital payment tokens (from 1 January 2020) are exempt from GST.

To learn more about the GST registration process and matters pertaining to the GST registration, please visit the IRAS website.

Why did we need to raise GST to 9%?

Our population is ageing. In 2019, about 15% Singaporeans were aged 65 and above. By 2030, this will increase to 25%. We will need to spend more on healthcare to support our seniors. These are our grandparents and parents.

We need more national revenue to support higher spending. Raising GST is the prudent and sustainable way to achieve this.

The needs are recurrent and therefore require a recurrent source of revenue.
The increased expenditure will benefit all; it is therefore fair for all to contribute.

How will the Government help to manage increases in Cost of Living?

We will keep the cost of living manageable and affordable.

The Government will continue to support Singaporeans through subsidies on education, health, housing, and other assistance.
For more information on the support you are eligible for, you may check out the Support for You Calculator.