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All You Need to Know About Import Tax When Shipping Goods into Singapore

E-commerce · 10 Mins read

All You Need to Know About Import Tax When Shipping Goods into Singapore

According to the DHL Global Connectedness Index (GCI) in 2020, Singapore was named the world’s second most-connected country, just behind the Netherlands. With a robust economy that hits well above their weight, and with regional supply chains thrusting its strong performance, it is no wonder the nation’s citizenry has a strong appetite for overseas and online shopping. 

Coupled with its close proximity, Singapore is a practical destination for Malaysian merchants looking for overseas opportunities. Its business-friendly practices, secure infrastructure and strong value of the Singapore dollar against the ringgit all work to bolster a strong demand.

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Singapore customs tax and duties

With more than 20 active bilateral and regional Free Trade Agreements (FTAs), the garden city has a relatively open-trade policy. Therefore, the barrier of entry is rather low. However, for Malaysian retailers looking to import goods or services to the domestic market, it is essential to take note of the customs tariffs payable.

Currently, there are three types of import fees in Singapore.

1. Goods and Services Tax (GST)

Generally, all goods entering Singapore are subject to a 7% Goods and Services Tax (GST) on imported goods. This import fee is applicable for items which have a total value of SG$400 (approximately RM1,240) and above. The taxable value is calculated based on its Cost, Insurance and Freight (CIF) value and all other duties and tax charges. In the case of non-dutiable goods, GST will be based on the CIF value, along with any commission and incidental charges even if they are not included in the invoice. 

GST is paid by the consumers, but is remitted to the government by businesses selling the goods and services. In 2021, the Singapore government announced that low-value goods bought online will also be subjected to GST from 1 January 2023.

2. Customs duty and excise duty

Customs duty and excise duty are taxes that are imposed on dutiable imported goods to, or manufactured in, Singapore - depending on the nature. Both customs and excise duties may be levied on certain items such as alcoholic beverages with high alcohol strength. There are four categories of dutiable goods:

  • Intoxicating liquors

  • Tobacco products

  • Motor vehicles 

  • Petroleum products/biodiesel blends

The taxes are calculated based on ad valorem or specific rates, whereby imported goods are taxed based on a percentage of the total shipment value or specified amount per unit of weight or other quantity. 

Paying import tax in Singapore

There are several payment modes for merchants who need to pay import tax, but they depend on how the goods are shipped into Singapore. For postal shipments, payments can be made via the Immigration and Checkpoints Authority (SG) counter in person. Customs declarations and taxes for courier shipments are usually handled by the courier companies. 

For all other shipping methods, businesses may need to pre-register for an importer account and set up an Interbank GIRO (IBG) account with Singapore Customs. All import tax payments are debited from this account.

Start your global export journey

Businesses in Malaysia can reduce the inconvenience for their customers in Singapore by staying informed about customs regulations. Even though the country operates a free port, the payment of import tax and duty fees is mandatory and failure to comply may result in serious penalties. As the world grapples with COVID-19, retail activities are increasingly becoming borderless. This presents a wealth of opportunities for Malaysian businesses looking to export into Singapore or other markets around the world. 

With online shopping fast becoming one of the most popular activities around the world, a robust export strategy should be the next for any business looking to make their presence known across the map. Start with our toolkit for international shipping.

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