Singapore is a relatively small but efficient city state with pro-business trade agreements with many countries, including New Zealand. As one of the leading shipping hubs in the Asia Pacific region as well as fuss-free and efficient import tax procedures, it is a favoured destination for businesses looking to penetrate into this market.
Singapore is known as one of the world's most advanced economies and has a strong reputation as a major financial hub in the Asia Pacific region. With a robust economy that hits well above its weight and regional supply chains boosting its strong performance, it is no surprise that people in Singapore have a healthy appetite for goods from the overseas market.
As New Zealand’s largest trading partner in Southeast Asia, the trade and economic relationship between the two countries is strong. Through a steady economy that is set to bounce back after the global coronavirus crisis, and an increasing demand in consumer goods from New Zealand, the small island nation is a practical destination for New Zealanders looking to do business there. Its business-forward practices, safe infrastructure and strong dollar value that is relatively on par with the New Zealand dollar further enhance its potential as a good trading partner.
Customs taxes and duties in Singapore
The Singapore government also announced a change in the way Goods & Services Tax (GST) would be levied upon all imported goods purchased online from overseas suppliers, at 8%, effective from 1 January 2023. To allow businesses to prepare for this transition, it is important to stay up to date with the latest import tariffs which may be payable on entry.
If you are a New Zealand merchant looking to ship to Singapore, read on to understand more about the different import taxes required.
1. Goods and Services Tax (GST)
Since 1 January 2023, imported goods that are valued at more than S$400 are subject to an 8% GST fee, which is paid to the Singapore tax department. This comes after the 2022 Budget, which announced that the GST hike will take place in two phases – an increase from the current 7% to 8% from 1 January 2023, and a subsequent increase to 9% from 1 January 2024.
Additionally, low-value goods imported via air or post will also be taxed. These goods, which are valued at S$400 and below, will be subjected to the same prevailing GST rate as outlined above.
GST is paid by the consumers in Singapore, but is remitted to their government by businesses selling the goods and services. The taxable value is calculated based on its Cost, Insurance and Freight (CIF) value and all other duties and tax charges. In the case of non-dutiable goods, GST will be based on the CIF value, along with any commission and incidental charges even if they are not included in the invoice.
2. Customs and excise duty for imported goods
On top of GST, some imported goods in Singapore may also be subjected to another form of import duty. Referred to as customs duty or excise duty, they are imposed on dutiable goods from specific categories, such as beverages with high alcoholic strength. There are four types of dutiable goods:
Intoxicating liquors
Tobacco products
Moto vehicles
Petroleum products and/or biodiesel blends
These excise duty fees are calculated based on ad valorem or specific rates, whereby imported goods are taxed according to a percentage of the total shipment value or specified amount per unit of weight or other quantity.
How to pay for Singapore import taxes
Businesses can pay for import tax through several convenient payment methods, which also depends on the mode of shipping. For postal shipments, tax payments can be made via the Immigration and Checkpoints Authority (ICA) counter in Singapore in person. For all other shipping methods, an importer account may need to be registered and linked with an Interbank GIRO (IBG) account, usually with a local bank. All import tax and duty payments are debited from this account.
However, it can be a hassle having to visit Singapore personally – or sometimes even downright impossible. As such, many courier or logistics companies such as DHL Express will handle customs clearance and payment of such taxes on behalf of their customers in Singapore.
Ship to Singapore efficiently
With the implementation of the new GST hike rules in Singapore come January 2023, your customers will be required to pay Singapore import tax whenever they do online shopping. While the tax free import limit of S$400 is still in play for now, it is inevitable that the upcoming changes will cause confusion to both merchants and their customers alike. To prevent such issues, it is important to stay informed about the latest customs regulations at all times.
Even though Singapore operates a free port, the payment of import tax and tariffs is mandatory and failure to comply may result in serious penalties.
With online shopping fast becoming one of the most popular activities around the world, a robust export strategy should be the next area to focus on if you are looking to make your presence known across the map. Start by choosing to work with a professional logistics service provider like DHL Express to boost your business’s e-commerce capabilities. By ensuring your products go where they need to without any hiccups along the way, we can help you cut down on shipping costs and make efficient use of your resources.
DHL Express is a reliable export partner for businesses in New Zealand and around the world. The Southeast Asia hub operates 24/7 with all-round support which includes in-house customs brokers and local customer service. Along with Transport Asset Protection Association (TAPA)-certified facilities and 136 retail outlets across the island, businesses will have no problem increasing the efficiency of their export processes.
Speak to us to find out more about import taxes and duties in Singapore, or open a DHL Express account to get started!
