No reason for digital services to be exempted from tax

A commuter using his mobile phone at Bishan MRT station, on Feb 23, 2017.
A commuter using his mobile phone at Bishan MRT station, on Feb 23, 2017. PHOTO: ST FILE

There is really no reason why digital services or any Internet transaction should be exempted from tax (True cost of taxing digital services, by Ms Wilda Willian Ong, May 18).

These commercial applications are already way past their infancy or gestational periods, and deserve no mollycoddling from the vagaries of market competition.

Why should downloaded software, digital assets, Web applications and other e-purchases from digital companies continue to have such an inequitable advantage over businesses that operate in physical premises, provide warm personal service and offer gainful employment for Singaporeans?

Meanwhile, national revenues are continually lost to companies that have offshore operations, unless lucrative profits skimmed off by them locally are subjected to taxes.

So, if massive profits have been made from us, and our private information has been mined mercilessly - sometimes without our permission - what is the rationale for sparing them the taxman's dues?

Based on the $225 billion worth of services that Singapore imported in 2016, according to statistics, the goods and services tax of 7 per cent will yield about $15.8 billion worth of extra revenue for the Government.

Yik Keng Yeong (Dr)

A version of this article appeared in the print edition of The Straits Times on May 21, 2019, with the headline 'No reason for digital services to be exempted from tax'. Print Edition | Subscribe