Singapore imposes new tax policy for foreign tourists

JAKARTA (JP): Indonesian tourism executives are urging Singapore to revise its newly-implemented three-percent general sales tax, which they claim has burdened Indonesian tourists.

The president of PT Setia Tours and Travel, Nurdin Purnomo, said here yesterday that the tax, imposed by the Singapore Tourist Promotion Board (STPB) as of April 1, is discouraging Indonesians from making shopping trips to Singapore.

STPB's service director, Evelyn Sen, said, however, after attending a presentation on the "Great Singapore Sale" campaign, that the tax will not affect tourists from Indonesia.

She said the tax will be refunded if visitors spend at least S$500 (US$320) in one store.

Furthermore, retail prices in Singapore will not increase after the imposition of the tax, she said.

Prices are in fact declining due to the appreciation of the Singapore dollar against the Japanese yen, she added.

Another executive of the board, Hassan Kassim, noted that the Singapore dollar is also strengthening against the U.S. dollar.

"The U.S. dollar is currently trading at around S$1.60, much stronger than S$2.20 four years ago," he said.

Overpriced

Nurdin, however, said that most major shopping centers in Singapore overpriced their goods.

"I often find that goods in Singapore are sold at prices 10 to 20 percent higher than similar goods in Jakarta," he observed.

He attributed the higher living costs, expensive leasing space in shopping centers and high payments for employees for the higher prices.

Kassim said the general sales tax is imposed on all customers, including Singaporeans. But shops with annual sales of less than $1 million are exempted from the tax.

"Tax refunds are available for foreigners who fill out certain forms at the airport when departing," he said, adding that the tax rate in his country is far lower than the value added tax of 12.5 percent in New Zealand and 17 percent in Britain.

Singapore has become the world's 11th largest earner of foreign exchange from tourists and topped the list of tourist arrivals among Association of Southeast Asian Nations (ASEAN) member countries in 1993 with 6.4 million visitors who spent US$8.5 billion last year.

Sen said that tourist arrivals are estimated to increase by four to six percent this year.

The "Great Singapore Sale," under which department stores in Singapore will offer discounts of up to 70 percent from July 17 through Aug. 17, is a first for the city-state. (icn)