GST on Low Value Imports: Tax and Fees Now Cost More than the Item, Cry Consumers!

When Melinda Goh ordered a S$9.90 blouse from an online store based overseas, she did not expect the cost of GST and SingPost handling fees to total up to even more than the cost of the blouse.

Altogether, she paid $10.79 – S$10 in handling fees to SingPost and S$0.79 in GST.

Since January this year, 8 percent GST will apply to low-value goods imported to Singapore, while previously this only applied to purchases that cost more than S$400.

Besides the GST, there is also a handling fee that must be paid to courier companies if the overseas business is not GST-registered.

This handling fee is a service fee, as couriers have to administer the GST payment to Singapore customs on behalf of consumers.

While SingPost charges a flat rate of S$10 per consignment, FedEx and DHL charge a minimum of S$12 and S$20 respectively in service fees.

Said frequent online shopper Jason Neo:

“When you add everything up, it’s more than just an 8 percent increase, more like an 18 percent increase!”

Singapore’s tax authority, IRAS, say that the new GST scheme for low-value imported goods is “intended to achieve a level playing field in GST treatment for all goods consumed in Singapore, whether procured locally or from overseas”.

However, consumers have complained that this does not make sense, and simply gives businesses here more reason to jack up prices instead of finding ways to remain competitive and relevant.

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