In an attempt to influence the Singapore government on the upcoming Budget 2016, accounting firm Ernst & Young (EnY) made an open call to collect GST taxes from companies with taxable turnover of S$500,000 and above (the existing GST registration threshold is S$1 million). Businesses
It is understood that making these smaller companies register for GST will increase business costs and result in inflation for consumers. EnY GST Services partner, Kor Bing Keong, claimed that this move is to offset “the increase in social spending”:
“The government could consider lowering the GST registration threshold to S$500,000 per annum. A high GST registration threshold was important at the start of GST implementation as it relieves small businesses from GST registration and compliance.
GST has now become an integral part of businesses and GST-compliant accounting and point-of-sale software is readily available. With the expected increase in social spending by the government, a decrease in GST registration threshold could bring more businesses into the GST net and increase revenue collection.”
However at the same time, EnY called for lower income tax, increasing cap for tax rebates for medical expenses, not increasing the corporate tax and higher tax rebates for research and development, expand the cash rewards for the Productivity and Innovation Credit (PIC) schem, and lower corporate taxes for small and medium enterprises. It appears EnY intentions to collect more GST is to compensate for these tax rebates, and not for the purpose of “social spending” as it claimed.
Just earlier this month and in Nov 2015, another accounting firm PwC made two attempts lobbying for lower taxes and higher GST.