Online shoppers in Singapore may have to pay tax

(Feb 12): Singapore may unveil an e-commerce tax in next week’s budget, setting the tone for a region that’s grappling with online retail’s assault on brick-and-mortar vendors.

Eight of the 12 economists in a Bloomberg survey said the Feb 19 budget will contain a new tax on online vendors, with another betting that cross-border digital transactions will now be included in the goods-and-services tax regime. Thailand, Indonesia, and Malaysia -- where governments are funding ambitious infrastructure programmes -- are also considering similar plans.

Southeast Asian governments are seeking to level the playing field for traditional vendors given the rapid growth of online retailing on platforms such as Lazada, controlled by Alibaba Group Holding, and Amazon.com. BMI Research projects the region’s six biggest economies will boost e-commerce to US$64.8 billion ($86 billion) in 2021 from US$37.7 billion last year, while Credit Suisse Group AG estimates that online shopping growth could outpace that of traditional retailers by six to 10 times over the next few years.

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