IRAS Tax regime needs to evolve in digital economy
According to an Organisation for Economic Cooperation and Development report last year on tax challenges arising from digitisation, one of the business models identified as having arisen in a digitalised economy is that of vertically integrated firms - businesses that have integrated the supply side of the market within their business.

Examples given were Amazon and Netflix.

Highly digitalised businesses such as these are often involved in the economy of a country to a large extent without having any significant physical presence.

They establish and maintain purposeful and sustained interaction with their customers in that country via an online presence.

For such businesses to be able to have a significant economic presence without being liable to tax would be highly unfair to traditional brick-and-mortar businesses.

Imposing taxes on such businesses would therefore be fair.

Increasingly, the lines are getting blurred as the digital economy becomes the economy itself.

It is getting more difficult by the day to segregate the digital economy from the rest of the economy for tax purposes.

It is hence imperative, even inevitable, that Singapore's progressive tax regime evolves in tandem vis-a-vis taxing of digital services.

Woon Wee Min

Source: https://www.straitstimes.com/forum/letters-in-print/tax-regime-needs-to-evolve-in-digital-economy

Add Comment

---