Government to implement regulatory changes with a gradual approach to minimize tax impact
Singapore will introduce a list of government fees exempt from the Goods and Services Tax (GST) by the end of April 2024, as part of changes aimed at clarifying the tax treatment of regulatory fees. Second Minister for Finance Chee Hong Tat announced this adjustment on April 2, noting that fees not included in this list will be subject to GST, including those previously uncharged.
This comes after the discovery of incorrect GST charges on 18 regulatory services, which resulted in refunds of at least S$7.5 million. The changes aim to streamline the process, reducing confusion among agencies. The government has pledged to absorb the GST until the end of 2025 to minimize the immediate impact on stakeholders.
The updated approach categorizes fees into three types: those already subject to GST, those incorrectly charged GST, and those that should be taxed based on clarified policy intent. The government will assess all remaining regulatory fees, working closely with agencies to ensure alignment with the new framework, with the review slated for completion by September 2024.
