Tax system must stay fair even in digital economy: Indranee
For the sake of fair competition, the authorities here aim to ensure that traditional and digital businesses are taxed on an even playing field, Senior Minister of State for Law and Finance Indranee Rajah has said.
Singapore's tax system must keep up with digital disruptions, as companies will face more uncertainty in global business if different tax jurisdictions take different approaches to the digital economy, she added.
Her comments at a conference yesterday underscored Singapore's focus on crafting and sticking to international tax standards to promote a stable business environment.
"Jurisdictions across the world, including Singapore, are grappling with how to deal with taxation of digital economy and studying this closely," she said.
"Some jurisdictions have taken steps to adjust their GST (goods and services tax) system to ensure a level playing field between their local businesses, which are GST-registered, and foreign-based ones, which are not. We are studying how we can do likewise."
Ms Indranee said tax neutrality would aim to establish "fair competition" between traditional and more heavily digitalised businesses, because "there should be fairness in terms of the taxes paid by businesses, regardless of their extent of digitalisation", and emphasised that a level playing field for businesses across the world is a priority for Singapore.
"Having a consistent set of international tax standards, which is respected and abided by all jurisdictions, helps encourage greater cross-border trade and investments," she said.
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