Taxes

GST to Rise to 9% and Tobacco is up 10%

Cigarettes are now more expensive in Singapore, by at least a dollar, with effect from the 19th of February, following the reviewed GST rates as announced in the annual budget. This did not come as a surprise for many as some retailers had already planned a review of the prices of tobacco before the new rates were to be in effect, especially for the imported brands of cigarettes. The excise duty has been increased by 10% and it covers all types of tobacco products. It is not clear though if this review and the significant increase in retail price will have a substantial impact on the smoking habits of Singaporeans.

A pack of twenty Marlboro White cigarettes is now priced $14.10. It was $13 earlier. Sampoerna A Menthol cigarettes are now $13.80 per pack, up from $12.30. Rolling tobaccos, for example Butterfly Yellow, now cost $12. Excise duty for tobacco products was last reviewed four years back and even then the increase was 10%. After the goods and services tax is applied, one cigarette weighing around a gram will cost four cents more now.

Singapore has been taking a few well planned measures to discourage smoking. The minimum age was reviewed and raised recently. There is a ban on imitation and emerging tobacco products. An increase in price is definitely going to discourage some, if not all, smokers. There is also a direct impact on the revenue collected as excise duties and goods & services tax. Yearly revenue generated by Singapore Customers for all types of tobacco products is just over a billion, according to the latest data available for last year. Antismoking activists advocate setting up of more smoke-free or smokeless zones around the city state to have the desired impact on smoking, especially among the young. Those who are not too optimistic about the tax hike are of the opinion that the new prices will only act as a temporary deterrent and that those who are actually addicted to smoking will absorb the cost without really cutting down on the number of cigarettes they smoke.

There have been many other significant developments in the annual budget. There is a one-off bonus of $700 million. Budget surplus for the last year has been higher than what was forecasted in the preceding year. There has been a substantial increase in MAS contributions and stamp duty revenues. However, there could be a deficit of almost $0.6 billion through 2018.

The government has increased the Buyers’ Stamp Duty for residential properties from 3% to 4%, applicable to properties worth over $1 million. The Goods and Services Tax has been raised by two percentage points to 9% but it would be phased over the next seven years. There have been significant reviews of sector specific budgets for education, infrastructure, healthcare, carbon taxes, employment and training. Healthcare expenditure is poised to surpass spending on education. The budget also factors in the preparations required to deal with the needs of an ageing population in times of dynamic technological innovation.

About the Author

Morris Edwards is a content writer at CompanyRegistrationinSingapore.com.sg, he writes different topics like Why Is Singapore Preferred For Incorporation By Start-Ups?,  Guide to the Singapore Tax System and all topics related to doing Business in Singapore. If you need Singapore Company Setup Services visit our website.

Contact:
Company: Singapore Company Incorporation Consultants Pte Ltd
Address: 10 Anson Road International Plaza #27-15, Singapore 079903
Telephone: +65 66531211
E-mail: info@companyregistrationinsingapore.com.sg
Website: https://www.companyregistrationinsingapore.com.sg