Top Reasons Your Business Should Register for GST
In Singapore, Good and Services Tax or GST is similar to VAT that is imposed by many other countries. For some years now, the government has not touched on this tax due to the manner in which it has worked. This explains why many individuals and businesses are happy. Foreign company registered in Singapore requires compliance with GST that falls into two primary categories: Voluntary and Compulsory. Depending on circumstances, your business can be exempted from GST. It is advisable to opt for voluntary registration as it can benefit your enterprise in different ways.
The following are some of the reasons to register for Goods and Services Tax:
Reduce Income Tax Rates
The World Economic Forum found Singapore to be quite appealing because of its personal and corporate tax framework. Thus, low-income tax rates are implemented as a result of GST. As a result of tax revenue growth, the government can keep the rates for personal income tax rates as minimum as possible. Moreover, with consumers paying Goods and Services tax each time they buy a commodity, having low individual income tax rate becomes more viable.
Establish Your Presence
Singapore has a competitive market. Thus, establishing your business presence can be a tough challenge. It is a must for large businesses to register for this tax. This is because the large turnover puts them in a particular category where it is not an option for voluntary registration. When you voluntarily register for Goods and Service Tax, you make your business look established and can compete with the big players. For instance, when vendors and customers find out that your company is registered for GST, they believe that your company generates significant revenue and it is of a given size. In this way, you can create a psychological effect on your customers and vendors.
Boost Investments and Savings
The good thing about Goods and Service Tax is that individuals are taxed when they purchase your goods and services. This means that your individual tax rates are greatly reduced. Besides, your investments and savings can be exempted from any form of taxation. The fact that a lot of businesses are voluntarily registering for GST means that the concerned governmental agencies have accurate forecasts of future revenue. Therefore, you can invest and save your money without worrying that it can be taxed. You should note that your investments and savings are exempted from the taxes.
Reduce Cost of Doing Business
As you know, every entrepreneur loves something that helps them save money. This is what happens when you register for GST. Over the years, the GST system in Singapore has proven to be an efficient tax system. This explains why it appeals to most foreign investors when looking for foreign company registered in Singapore. Moreover, the cost of collection and administration is quite low for the government. Ideally, the consumer is the one who pays taxes, and your business acts only as a channel. Since you do not bear any given tax costs, it becomes easy to prepare your financial statements. When doing Singapore company registration, it is vital to take into account both the long-term and short-term benefits of voluntary GST registration.