History of GST in Singapore
GST was first introduced in Singapore on April 1, 1994 at 3%. The GST rate was increased to 4% in 2003 and to 5% in 2004. As announced in Budget 2007, the GST rate was raised to 7% on July 1, 2007. This is the prevailing rate. It is a ‘multi-stage’ tax that is collected at every stage of the production and distribution chain. The tax is paid when money is spent on goods or services, including imports.
So GST is levied on:
- goods and services supplied in Singapore by any taxable person in the course or furtherance of a business; and
- goods imported into Singapore by any person.
In general, a supply is either taxable or exempt. A taxable supply is one that is standard-rated or zero-rated. Only a standard-rated supply is liable to GST at 7%.
Zero-rating a supply means applying GST at 0% for the transaction. A GST registered trader need not charge GST on his zero-rated supplies, but he is nevertheless allowed a refund of the tax he has paid on his inputs. In Singapore, only “exports” of goods and “international” services are zero-rated.
If a supply is exempt from GST, no tax is chargeable on it. A GST registered trader does not charge his customer any GST on his exempt supplies. At the same time, he is not entitled to claim input tax credits for any GST paid on goods and services supplied to him for the purpose of his business. The “sale and lease of residential properties” and “financial services” are exempt from GST in Singapore.
Please do note that in other countries, GST is known as the Value-Added Tax or VAT.
GST/VAT/Sales Tax Rates by Countries
GST / VAT / Sales Tax Rates
0% GST (Essential items)
10% GST (Others)
7% VAT (Reduced rate for certain consumer goods)
0%-28% GST (Variable rates on variable items)
23% VAT (Goods)
9%-13.5% VAT (Services)
0% VAT (certain items of food)
8% (Consumption tax)
10% VAT (Standard rate)
0% VAT (Zero rate for certain goods and services)
0% VAT (For senior citizens and persons with disability)
21% VAT (Standard rate)
6% VAT (Reduced rate for certain goods and services)
7.7% VAT (Standard rate)
3.8% VAT (Special rate for overnight stays in hotels (incl. breakfast)
2.5% VAT (Reduced rate for certain consumer goods)
5% – 10% VAT
20% VAT (Standard Rate)
5% VAT (Reduced Rate for home energy and renovations)
0% VAT (For life necessities)
0% – 8.3% (Max local sales tax rates, varies by jurisdiction)
0% – 7.25% (State-level sales tax rates, varies by jurisdiction)
Consult a GST services provider to help you understand and file GST correctly in Singapore.
How GST/VAT was rolled out in other jurisdictions
While, France was the first country to implement GST way back in 1954, now over 160 countries have GST/VAT in some form or the other. Most European countries rolled out this tax in mid 1970s-80s. Now, with China completing VAT reforms in 2016 and also implementing partial GST on some goods, along with India launching its multi-tiered GST last year, the US remains the only major economy that doesn’t have a GST.
In Australia, the tax was introduced in 2000, way later than its neighbour New Zealand which did in 1986. While in NZ, the rates increased from 10% to the prevailing 15% now, Australia is still at 10%.
Singapore’s neighbour Malaysia also implemented GST in 2015 (6%), Canada in 1991 (5%).
GST refund to tourists in Singapore
Tourists to Singapore can obtain a refund of the GST paid on goods purchased from retailers who participate in the Tourist Refund Scheme (TRS). However, the refund applies only to tourists who are bringing their purchases out of Singapore via Changi Airport or Seletar Airport within two months from the date of purchase, and to tourists who are departing Singapore on international cruises.
Get help in comparing GST rates across the world and file correctly
Singapore's with the GST rate of 7% is among the 160 countries having the goods and services tax in one form or another. We can help you understand the dos and don'ts of GST and file correctly according to local laws.