Why Water Conservation Tax is not like COE
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ST Forum 4 August 2007
Why Water Conservation Tax is not like COE
All I can see is double taxation
IN HIS letter, 'Is Water Conservation Tax fair? Ask Iras' (ST, July 2
, Mr Karma Tsultrim Wangchuk suggested that the Water Conservation Tax (WCT) should not be subject to GST. We thank him for this opportunity to clarify the policy on GST.
GST is a tax on the final value of goods or services supplied in Singapore. Taxes and duties that are related to the supply of a good or service - for example, tobacco duty, liquor duty, betting and sweepstake duties, and WCT - form part of the final value of the good or service. GST is thus imposed on the final value, inclusive of such taxes and duties. This is also the practice in the United Kingdom, Australia and New Zealand.
Charges that have no relation to the supply of goods and services do not attract GST. For example, the Additional Registration Fee, Certificate of Entitlement (COE) and Registration Fee are imposed on the registration of a motor vehicle, and not its supply. Similarly, Road Tax is imposed on the ownership of a vehicle. It is possible to sell a car without paying any of these registration or ownership charges, provided the car is not registered for use on public roads. Hence, GST is not imposed on them.
We thank Mr Wangchuk for his feedback.
Harvey Koenig
Deputy Director (Tax Policy)
Ministry of Finance
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THE RATIONALE
Charges that have no relation to the supply of goods and services do not attract GST. For example, ARF, COE.
Latest comments
What is the definition of "supply" then? Because the water that we use has to be "supplied" (distributed) through water pipes, it therefore attracts GST? Or else, we can purify it ourselves from rainwater or the reservoir (and in the latter case, then we'll just be charged for the purification, not the WCT)? I'm sorry, but I cannot follow the (lame) logic here.
Posted by: unewolke at Sat Aug 04 08:19:39 SGT 2007
I still don't understand - the WCT is obviously a tax, but now it's disguised as forming 'part of the final value of the good or service'. I can understand the rationale for the WCT, but the current practice (and merely saying that the same practice exists in the UK, Australia and NZ as well is just herd mentality) does not explain why it is against the general principle of not taxing taxes. And incidentally, so what if the practice exists in the UK, Australia and NZ? Because we are part of the Commonwealth???
Posted by: unewolke at Sat Aug 04 08:15:28 SGT 2007
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they always quote foreign practices when it suits their cause.
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Sian liao!
So many people had made noise already.But the people at MOF are always right,our voices will never be heard.Cos they are scholar and we are not.