Govt studying best way to implement e-commerce tax: Indranee Rajah

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Shoppers can still enjoy tax-free online purchases for now

The Government is still studying the best way to implement an e-commerce tax as it works towards the Budget on Feb 19, Senior Minister of State for Law and Finance Indranee Rajah said yesterday.

This means shoppers can enjoy tax-free purchases made online for a while more, she told Money FM 89.3, Singapore's first and only business radio station.

"It's certainly something we would like to do, but we have to be careful about how we do it because we've seen some other countries where they implemented it and then had to dismantle it because it didn't work out quite well," she said.

"So that is something we are studying carefully. Keep shopping while you can."

Ms Indranee is partial to a spot of online shopping herself. She told the station, which launched last month, that her last Google search was British fashion e-retailer Asos.

She said in a Bloomberg interview last November that e-commerce would likely come under the tax regime, ensuring a more level playing field between bricks-and-mortar and online businesses.

Some observers have speculated that the goods and services tax (GST) will be raised in the Budget.

Ms Indranee noted that Singapore's tax system "is designed to be progressive" so lower- income households will be supported.

Previous GST hikes were always accompanied by an offset package to help the less well-off, she added.

Young families will continue to be supported in the Budget, Ms Indranee noted, with pre-school education and support for young children continuing to be a focus.

There will also be measures to build more supportive communities, especially for the elderly.

In the past few years, the Government has introduced the Pioneer Generation Package, Silver Support Scheme and Community Health Assist Scheme, all of which addressed "the monetary aspect", she said.

She noted that Britain has appointed a new Minister for Loneliness. In a similar vein, the Budget will seek to assure families with elderly parents that help is available through community support.

"It's zeroing in on a real problem - there are a lot of elderly who are lonely there and it's not dissimilar here. So you have to look at the intangible things and see how you can... address that," said Ms Indranee.

This year's Budget will also take a "strategic approach" towards jobs.

This means helping whole industries to innovate and transform, and helping workers retrain in new skills, she said.