In Singapore, the Goods and Services Tax is very similar to the Value Added Tax (VAT) imposed in most countries. Registration for GST comes under two categories: Compulsory and Voluntary. Under certain conditions, it is possible that your business is exempt from registering for GST. However, voluntary registration for GST could be valuable to your business. Here are the benefits of GST registration for your business:
Set up a Presence
In a competitive market like Singapore, setting up your company’s presence can be an immense challenge. Big businesses are mandatory to register for GST as their revenue usually puts them in a compulsory category. Voluntarily registering for GST makes your business appear as well-known as the big players and lets clients know that you stand for business. When clients and vendors find out that your company is registered for GST, they automatically make the link that your business is of a certain size and generates great revenue.
Lower Individual Income Tax Rates
Lower personal income tax rates can be implemented fairly because of GST. The tax revenue growth data collected to make sure that the government is aware of the sum of income from corporate tax payments and permits them to keep personal income tax rates as low as possible. Besides, with people paying GST whenever they buy an item, having lower individual income tax rates becomes a lot more feasible.
Boosts Savings and Investments
One of the finest things about GST is that people are taxed only when they spend on consumer goods and services. Not only does this mean that individual tax rates are lesser, but also that savings and investments end up being exempt from any kind of taxation. The rising number of companies registering for GST means that the government has a much more precise forecast of future returns. As a result, people are allowed to save and invest their money without being anxious that it will be taxed. Since people are already paying GST every time they buy something, it seems only fair that savings and investments be free from taxes.
Lower Cost of Administration and Doing Business
In the end, everything that helps save money is a good thing. And that is exactly what registering for GST does. As a result, not only is it appealing to foreign investors, the cost of administration and collection is a lot lower for the government. Similarly, the cost of doing business is also lowered. With GST, the customer is the one who is the real taxpayer and the business merely acts as a medium. This means that businesses do not have to bear any tax costs and it makes life a lot easier at the end of the financial year.
GST Schemes for the advantage of Registered Businesses
Following is a list of GST schemes that a registered company can take advantage of.
- Cash Accounting Scheme
- Discounted Sale Price Scheme
- Gross Margin Scheme
- Hand-Carried Exports Scheme
- Import GST Deferment Scheme
- Major Exporter Scheme
- Tourist Refund Scheme
- Zero GST Warehouse Scheme