Given the greater spending needs ahead, Singapore’s government could outline additional ways to grow revenue in the coming budget speech, economists said.
The government has floated the idea of a “sugar tax” on manufacturers and importers of packaged sweet drinks. Such a tax could make its appearance in Monday’s budget speech, potentially adding 140 million to 500 million Singapore dollars to the country’s annual revenue, Citi analysts estimated.
Another source of new revenue could be the taxation of digital services, also known as the “Netflix tax.” Finance Minister Heng said in last year’s budget speech that such a tax would come into effect from 2020, so analysts are expecting more details to come this year.
“Importantly, the inclusion of more e-commerce transactions would allow the government to capture significant tax revenue opportunities (or close the loop on tax leakages) from this fast-growing segment,” Citi analysts said.
They added that taxing goods and services in the e-commerce industry could result in additional revenue of 500 million to 570 million for Singapore in financial year 2020.