Taxing e-commerce will hurt consumers

It is disconcerting to read reports about people pushing for taxes to be imposed on e-commerce and digital services (Taxman widens net over digital economy; Jan 4).

One of the reasons cited for the tax is that these companies have an unfair advantage over the brick and mortar shops, and the law should be applied equally to everyone.

If we find the advantage or the law unfair, the proper action to take is to remove the unfairness, and not to make it "unfair" for everyone.

The call to raise taxes will only drown out the benefits that the digital economy brings to people.

People like the digital economy because it is convenient, the price is good and they are able to buy things not available in Singapore.

Imposing taxes on online purchases is unfair to consumers and local businesses who have benefited from it.

Businesses are not the only losers when taxes are raised.

Their employees and customers are affected when the costs are passed down via pay cuts or job cuts and increased cost, respectively.

While taxes are needed to fund government operations, we should not think of raising taxes every time the current tax revenues are projected to be lower than expenditure.

Missing in the current conversation is the issue of government spending.

We should cut down government wastage, such as those flagged by the Auditor-General's Office, and also cut unnecessary government spending.

Taxes are a cost imposed on society, even when it has benefits.

Singaporeans are already facing a high cost of living.

The last thing we need is more taxes.

Yew Chii Ming

A version of this article appeared in the print edition of The Straits Times on January 11, 2018, with the headline 'Taxing e-commerce will hurt consumers'. Print Edition | Subscribe