Parliament: More businesses to be liable to pay tourism event tax

Since 2008, taxes to help defray the costs of key tourism events have been imposed only on gazetted hotels during the period of the Formula 1 Singapore Grand Prix.
Since 2008, taxes to help defray the costs of key tourism events have been imposed only on gazetted hotels during the period of the Formula 1 Singapore Grand Prix.PHOTO: ST FILE

SINGAPORE - More businesses that benefit from key tourism events will be liable to pay taxes to help defray the organising costs of these events, under changes to laws.

Currently, the Singapore Tourism Board (STB) has the power to collect such taxes, known as cess, from hotels, food establishments and public houses for specific tourism events which entail higher staging costs that use public funding.

Since 2008, cess has been imposed only on gazetted hotels during the period of the Formula 1 Singapore Grand Prix, collecting an average of $13 million a year.

With Parliament having passed the Singapore Tourism (Cess Collection) (Amendment) Bill on Monday (July 9), other commercial entities that benefit from such events may also be required to pay the taxes.

There are no current plans, however, to subject new tourism events or categories of establishments to such taxes, said Senior Minister of State for Trade and Industry Chee Hong Tat during a debate on the Bill.

"We are making these changes to the Act to provide flexibility to deal with future changes in business models and industry trends," he said.

He added that industry and stakeholder groups will be consulted if there are future plans to subject other events or categories of establishments to the tax.

 
 

Non-Constituency MP Daniel Goh, who spoke in support of the Bill, cautioned that any expansion of the rules would have to be done judiciously to avoid hurting local businesses.

He said that many establishments actually make losses during F1 due to road closures, making it tricky to identify which food establishments benefit specially from the event, for example.

He also asked about how the cess collected is used.

Mr Chee said that the cess collected by the STB has gone towards supplementing its Tourism Development Fund to support the cost of the F1 race, which is about $135 million a year. The Government foots about 60 per cent of the bill.

Government agencies have also worked with race promoters and affected stakeholders to improve the race execution over the years, for example, by halving the number of days for road closures from 12 days in 2008 to six days in 2017, he added.