Several Southeast Asian governments are considering the introduction of a specific ecommerce tax on online sales as they seek to get a share for government coffers of a vibrant part of this growing sector. Singapore, Thailand and Malaysia are among the countries introducing such taxes, or considering new taxes along those lines. But is there a possibility that such tariffs will stifle online?
Indranee Rajah is the senior minister of state for law and finance in Singapore and she said of the new tax being introduced there: “We’ve got to try and stay competitive, but at the same time, if you need to deal with expenditure for big items, you try and make sure your revenue streams are spread out across the board. You can imagine, 20 years from now, the way people purchase is very different and by that time online platforms will be mainstays, so if that’s not part of the tax regime, there’s going to be a lot of holes there.”
Bricks and mortar concerns around the world will point to the fact that they have greater expenses related to operations such as physical stores and things like business rates or the like than online firms. With the growth of online shopping, the old school have cried foul that the new kids on the block don’t suffer such tax burdens. Needless to say, that’s not necessarily true, but governments are considering such things as an ecommerce tax in the light of ecommerce’s unstoppable rise.
One other country where an ecommerce tax is under consideration is Australia. Amazon has recently launched down under and legislators and pundits are concerned it will have a detrimental impact on local retailers and SMEs there. No firm decisions have been made yet. But can it ever make sense to stymie progressive online businesses with taxes when other businesses have failed to embrace the new technology and not go online?