On 2 April 2024, the Goods and Services Tax (Amendment) Bill (“Bill“) was passed in Parliament. The Bill will amend the Goods and Services Act 1993 to improve clarity on the applicability of goods and services tax (“GST“) to fees charged by the Government, as well as fees charged by public agencies (collectively, “Government Fees“).
By way of background, these legislative amendments arose from the discovery of wrongful charging of GST by six agencies, as reported in the Straits Times article titled “Govt to refund $7.5m in GST wrongly collected by 6 agencies over 5 years“. To avoid such issues in future, the Government will centralise the assessment of whether GST should be charged, rather than leaving public agencies to perform their own assessments.
The key amendments introduced by the Bill are:
(a) Clarifying that GST will be charged for all Government Fees, excepting the fees prescribed in a list that will be published end-April 2024 (“Non-taxable List“). In essence, fees that are regulatory in nature will not be subject to GST, whereas fees for the provision of services will be subject to GST.
(b) As fees charged by public agencies are now explicitly subject to GST: Inserting a definition of “public agency”, namely any ministry, department or Organ of State of the Government (or public officer thereof), as well as body corporates established by a public Act for public functions. Town Councils are excluded from this definition.
(c) Deeming all GST imposed previously on Government Fees to have been validly imposed, save for those set out in the Schedule to the Bill.
In practice, more than 100 Government Fees will be newly charged with GST moving forward. These include examination and inspection-related fees. To cushion the impact, the Government will absorb the GST on these fees in the first instance, and impose a freeze on these fees until end-2025.
Click on the following links for more information:
- Second Reading Speech by Second Minister for Finance, Mr Chee Hong Tat, on the Goods and Services Tax (Amendment) Bill, in Parliament, 2 April 2024 (available on the Ministry of Finance website at www.mof.gov.sg)
- Full text of the Bill (available on the Singapore Statutes Online website at sso.agc.gov.sg)
Disclaimer
Rajah & Tann Asia is a network of member firms with local legal practices in Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Our Asian network also includes our regional office in China as well as regional desks focused on Brunei, Japan and South Asia. Member firms are independently constituted and regulated in accordance with relevant local requirements.
The contents of this publication are owned by Rajah & Tann Asia together with each of its member firms and are subject to all relevant protection (including but not limited to copyright protection) under the laws of each of the countries where the member firm operates and, through international treaties, other countries. No part of this publication may be reproduced, licensed, sold, published, transmitted, modified, adapted, publicly displayed, broadcast (including storage in any medium by electronic means whether or not transiently for any purpose save as permitted herein) without the prior written permission of Rajah & Tann Asia or its respective member firms.
Please note also that whilst the information in this publication is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as legal advice or a substitute for specific professional advice for any particular course of action as such information may not suit your specific business and operational requirements. You should seek legal advice for your specific situation. In addition, the information in this publication does not create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept, and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on the information in this publication.
