The 2% hike in service tax rate applies to all taxable services (except for telco, food & beverage (F&B), parking and logistics) and expansion of scope to include logistics, brokerage, underwriting and karaoke services. (source)
So logistics previously did not require service tax, but will be taxed 6% come this March. And why do I come across reports that TCM will be more expensive because of this?
Yup, but just now I found this rather recent article, saying the hike should not have a big effect to shops selling TCM, or even their consultation services, since most of them don’t have the revenue (500k per year) to require SST collection.
Their medicines are expensive not because of tax (in fact TCM is zero-rated), but due to our weak currency and lack of practitioners.
Ah I see. I wonder if it’s a lingering effect of GST. I recall many medicine shops had to close down as the GST made things too convulated for the elderly shopkeepers.
It’s easier to track the “underground economy” with GST or e-invoicing. Some shady businesses might have closed because Customs and IRB are involved in the GST system. Since we can’t touch GST now, this govt plan to introduce e-invoice in stages, which should have a similar effect.
On the 8% service tax though:
So logistics previously did not require service tax, but will be taxed 6% come this March. And why do I come across reports that TCM will be more expensive because of this?
TCM = traditional Chinese medicine?
Yup, but just now I found this rather recent article, saying the hike should not have a big effect to shops selling TCM, or even their consultation services, since most of them don’t have the revenue (500k per year) to require SST collection.
Their medicines are expensive not because of tax (in fact TCM is zero-rated), but due to our weak currency and lack of practitioners.
Ah I see. I wonder if it’s a lingering effect of GST. I recall many medicine shops had to close down as the GST made things too convulated for the elderly shopkeepers.
It’s easier to track the “underground economy” with GST or e-invoicing. Some shady businesses might have closed because Customs and IRB are involved in the GST system. Since we can’t touch GST now, this govt plan to introduce e-invoice in stages, which should have a similar effect.