GST Singapore – How the GST Changes from Singapore Budget 2019 Affect You

gst singapore budget 2019

One of the “lowlights” of Singapore Budget 2019 (and 2018 too, come to think of it) is the much-dreaded GST increase, together with the tightening limits for GST relief.

Like a pair of pincers, the two GST changes work in tandem to trap us cheapo Singaporeans trying to save a few bucks. Not only will you have to pay more GST domestically, there’s also no way to escape rising taxes by shopping in JB or Batam, or buying cheap booze at DFS.

I’m just kidding lah, please don’t flag me on the SGSecure app and put me in jail for sedition.

As a bleeding-heart liberal with a big soft spot for old people, I’m perfectly happy to pay more for my organic kale and aerial yoga classes, as long as my money goes to making life cheaper for lower-income and ageing Singaporeans.

Nonetheless, we should all stay on top of the latest GST changes in Singapore because they have very real repercussions on our spending and travelling behaviour.


Summary of changes to GST in Singapore (Budget 2018 & 2019)

Announced in Type of tax Change Effective date
Budget 2019 GST on goods from overseas (<48 hours) GST relief quota reduced from $150 to $100 19 Feb 2019
GST on goods from overseas (48 hours or more) GST relief quota reduced from $600 to $500 19 Feb 2019
Alcohol duties Duty-free alcohol limit reduced from 3 litres to 2 litres 1 Apr 2019
Budget 2018 GST on digital services GST will apply (previously no GST) 1 Jan 2020
Overall GST To increase from 7% to 9% 2021 to 2025
Not yet GST on goods from overseas (by mail) No change to GST relief up to $400 No change yet


Tightened GST import relief for goods from overseas (in effect)

If your typical travel itinerary consists of factory outlets, and the only time you ever exhibit mathematical potential is when calculating VAT refunds, then you’ll want to sit up and take notes:

During Budget 2019, Finance Minister Heng Swee Keat announced that the GST relief for duty-free goods will be tightened. They kick in on 19 Feb 2019 (today).

GST import relief 2019
Time spent outside Singapore Less than 48 hours 48 hours or more
GST relief (old) $150 $600
GST relief (new) $100 $500

Actually, these changes are not significant enough to seriously impact people who go to Europe to whack multiple Rolex watches and designer bags – because those confirm over the quota, even the old ones.

Besides, it’s not like you cannot bring your loot back to Singapore. You just need to declare them at Customs and pay GST. (No more breezing through the Nothing to Declare channel with an innocent look on your face, ah, people do get caught for GST evasion.)

But it does impact people who go on short trips to JB or Batam to save money on groceries, makeup, furniture and so on, because it’s now 33% easier to hit the GST relief limit.

So unless you’re a pro at acting blur and slipping past authorities, you might feel it’s better to just declare and pay GST rather than risk a fine. Anyway, you’d usually save money even after paying GST.


Duty-free alcohol quota reduced from 3L to 2L (1 Apr 2019)

Good news, guys! Aching arms from loading up on heavy bottles of alcohol at Changi Airport DFS will soon be a thing of the past.

No, it’s not because there will be robots helping us load the booze into the taxi home (why isn’t this a thing, though?) but because the duty-free alcohol limit will be reduced by a third from 1 Apr 2019.

Duty-free alcohol quota 2019
Duty-free limit (old) 3 litres (maximum 1 litre of spirits)
Duty-free limit (as of 1 Apr 2019) 2 litres (maximum 1 litre of spirits)

The duty-free concession applies only to those who have been outside of Singapore for at least 48 hours, and excludes those coming from Malaysia.

It’s worth repeating that there’s NO duty-free allowance for tobacco products. All tobacco, and all alcohol above the duty-free limits, must be declared at customs, where you need to pay duty and GST.

But hey, never mind the fact that alcohol is grossly overpriced in Singapore… Let’s rejoice in the fact that, through some arcane wizardry, there are actually more duty-free alcohol permutations than before!

From 1 Apr 2019, you can now choose from the following 5 combos (up from 3):

  • 1L spirit + 1L wine
  • 1L spirit + 1L beer
  • 1L wine + 1L beer
  • 2L wine
  • 2L beer

On the positive side, it looks like DFS at Changi Airport is going to be doing brisk business in February and March.


GST to apply to digital services (1 Jan 2020)

Okay, now let’s recap what was announced during Singapore Budget 2018. Not because I bo liao / got nothing better to write about, because we’re now one year closer to the GST changes announced then, kicking in.

First, there’s the fact that GST will be chargeable on digital services from 1 Jan 2020.

I don’t know about you, but I’m a little worried because of my near-comical dependency on the internet for almost all basic needs.

I honestly don’t know how I’d survive if things like groceries, household items and, um, food, weren’t so readily available on RedMart, Lazada and Deliveroo. Plus there’s entertainment subscriptions like Spotify and Netflix, gaming platforms like Steam, transport like Gojek and Grab, and payment/deal apps like Fave.

I’m not sure which of these companies will need to be GST-registered (there’s a criteria of at least $100,000 in annual sales to Singapore customers) but I guess we’ll find out in less than a year’s time.

While it’s probable that you don’t actually see GST as a line item in your in-app purchases, I wouldn’t be surprised if prices slowly increase by at least 7% (and soon, 9%) in the coming year. Dammit, that’s really going to eat into my credit card rebates.

Fortunately, the current GST relief on imported goods by mail (a.k.a. online shopping) remains the same: You don’t have to pay GST on shipments up to $400 each in value. For now.


GST to increase from 7% to 9% (2021 to 2025)

Now, this one is the real killer. Last year, Heng Swee Keat announced that GST in Singapore will increase from 7% to 9%, and it will kick in some time from 2021 to 2025.

This year, it was touch and go, with no further updates on when exactly and how the GST hike will be rolled out, and what GST vouchers will be implemented to cushion the blow. The suspense continues.


But at least we still get GST Vouchers…

I’m all for consumption taxes like GST, because I’m secretly a hippie who wants everyone to start composting at home and growing their own food.

No, seriously, the culture of consumption is crazy in Singapore. I do believe we should tax expenses – if only to make us more circumspect about the way we spend. Oh, and the fact that the revenue goes to basic necessities like roads, housing and healthcare? That’s good, too.

But raising GST and tightening GST relief limits is always the most painful for the poor. These are the ones who genuinely need to buy groceries from JB to save money – they’re not just doing it for the lulz.

So I’m glad that the GST Voucher scheme seems to be continuing. In fact, in 2019, the annual GST Voucher payouts are further boosted by a Bicentennial Bonus voucher of $150 or $300. For those in the lowest income GST Voucher tier (i.e. you get $300), this means your angbao from the government will be doubled to $600 in 2019.

As the name “GST Voucher” suggests, these are supposed to help mitigate the costs of the higher cost of living with the new GST changes. Don’t spend it all on a new iPhone and kaopeh that the gahmen never help you, okay?

How will you cope with the new GST changes in Singapore? Tell us in the comments.