6 October 2015

The Ministry of Finance (MOF) has, on 30 September 2015 accepted for implementation 7 of the 11 suggestions on the draft Goods and Services Tax (Amendment) Bill 2015 received during the public consultation exercise held from 13 to 31 July 2015.

According to the MOF, the remaining suggestions were not accepted for implementation as they are “inconsistent with the policy objectives of the proposed legislative changes”.

Key suggestions received that were accepted by the MOF are summarised as follows:

• The Comptroller of GST will be able to impose a Travel Restriction Order on those who fail to repay a tourist refund wrongly claimed under the Tourist Refund Scheme.
• Revisions to the definition of “aircraft” for the purpose of zero-rating supplies made in relation to an aircraft, and extension of zero-rating to specific supplies made in relation to non-qualifying aircraft.
• Technical change to clarify zero-rating applies to the supply of goods in relation to merchandise for sale on board an aircraft or ship.

Amongst the suggestions rejected were:

• Imposing a Travel Restriction Order on failure to repay a tourist refund wrongly claimed under the Tourist Refund Scheme may discourage tourism in Singapore as tourists could have unintentionally made a wrongful claim.

It was not accepted as the Travel Restriction Order is targeted at persons who, upon being notified, still failed to repay the erroneous refunds.

• Extending the scope of zero-rating to all types of aircraft. Overall revenue leakage is expected to be minimal given that domestic air travel in Singapore is limited.

Policy intent is not to zero-rate the supply of and supply relating to all types of aircrafts. Based on GST principles, consumption in Singapore should be taxed.

Suggestions accepted will be incorporated into the revised GST (Amendment) Bill and related subsidiary legislation, or in IRAS’s e-Tax Guides and website.

For further details, please refer to the MOF’s website.

Source: IRAS, MOF