Public Consultation on Proposed Amendments to the Singapore Tourism Cess Collection Act

Ministry of Trade and Industry

Consultation Period: 06 Mar 2018 - 13 Mar 2018

Status: Closed - Summary of Responses

Conclusion Of Public Consultation On The Proposed Amendments To The Singapore Tourism (Cess Collection) Act

The Ministry of Trade and Industry (MTI) and Singapore Tourism Board (STB) held a public consultation on the proposed amendments to the Singapore Tourism (Cess Collection) Act from 6 to 13 March 2018 via the REACH platform. MTI and STB also engaged more than 20 hotels through an industry engagement session, which was open to all hotels.

2 The proposed amendments to the Cess Act are part of the Government’s continual efforts to review and update regulatory frameworks, while maintaining the principle that potential key beneficiaries of a tourist event should contribute to funding the event. To date, only the Formula 1 Singapore Grand Prix has been declared a tourist event, with tourist hotels liable to pay cess during the event.

3 Most respondents sought to clarify the details of the proposed amendments, such as the scope of persons liable to pay cess in the future, calculation of cess payable for rooms sold through gift vouchers or loyalty points, and the date of implementation.

4 MTI and STB have reviewed the feedback received, and will take it into consideration in the drafting of the Bill. Further clarifications will also be provided. The first reading is currently scheduled to take place in 2Q/3Q 2018.

Detailed Description

Introduction 

1. The Ministry of Trade and Industry (“MTI”) and the Singapore Tourism Board (“STB”) are seeking public feedback on the proposed amendments to the Singapore Tourism (Cess Collection) Act (c.305C) (“Cess Act”). The public consultation period is from 6 March 2018 to 13 March 2018.

About the Singapore Tourism (Cess Collection) Act 

2. The Cess Act was enacted in 1972 to provide for the collection of cess from tourist hotels, tourist food establishments and tourist public houses for the promotion of tourism.

3. The Cess Act was last amended in August 2008 to provide for cess to be used in more targeted ways to fund specific tourist events and to change the nature of cess from a consumption tax to a business tax on relevant tourist establishments.  

Proposed enhancements 

4. MTI and STB have reviewed the Cess Act and are proposing the following amendments. 

4.1 Broaden the scope of persons or entities that may be liable to pay cess

Currently, the Cess Act provides for STB to collect cess from tourist hotels, tourist food establishments and tourist public houses to fund specific strategic tourist events. As the tourism landscape evolves, there could be more key beneficiaries of a tourist event – be it different types of businesses and/or new and evolving business models. The scope of persons or entities that may be liable to pay cess needs to be updated to accommodate the above changes. 

With this amendment, MTI/STB will be able to gazette new types of persons or entities assessed to be key beneficiaries of a specific tourist event and liable to pay cess. Nevertheless, there are no immediate plans to gazette new types of persons or entities to be liable to pay cess.

4.2 Clarify and streamline administrative requirements 

The Act amendment will also clarify and streamline several administrative requirements. These include: 

(i) Clarifying the scope for the imposition of cess to the transaction and supply of goods and services

This amendment will clarify that the scope for the imposition of cess applies to all goods and services which are transacted and/or supplied by the tourist establishment.   

 For example, where the transaction or supply of a hotel room is through cash gift vouchers, the value of such cash gift vouchers would be subject to cess.

As another example, where the transaction or supply of a hotel room is through an intermediary, the amendment clarifies that the cess is imposed on the gross receipts of the transaction and/or supply of the room, which includes the commission made to intermediaries, if any.  

Where the transaction or supply of a hotel room arises out of a corporate or wedding package, or where rooms are redeemed using loyalty points from member programmes, such rooms would also be subject to cess. 

The above change will provide clarity to the tourist establishments on circumstances where cess is payable. In addition, a validation clause will also be included to confirm the validity of past cess payments made by hotels.

(ii) Broadening the STB Chief Executive’s powers to obtain information from all persons or entities that may be liable to pay cess

This amendment will broaden the Chief Executive’s power to obtain information from all persons or entities that may be liable to pay cess. The Chief Executive will be able to request information, including digital records, from all persons and entities, before assessing the need to gazette them as a person or entity liable for cess payment. Such powers will be limited to specific purposes, such as to advise the Minister on whether a person or entity should be made liable to pay cess. The access to information will also include digital records as information is increasingly stored digitally.

(iii) Increasing the records retention period specified under current Section 9 from 2 years to 5 years

This change will bring the Cess Act in alignment with the GST Act, and also allow STB to access older records should the need arise.

Invitation to give feedback

5. MTI/STB invites views and comments on the proposals in paragraph (4). Respondents are requested to observe the below guidelines: 

i. Indicate your name, organisation and contact details (email address and/or telephone number) to enable us to follow up and seek clarification, if necessary;

ii. State and explain your feedback clearly and concisely, with reference to the relevant proposed amendment, using the prescribed template.

6. Please submit your views and comments to mti_feedback@mti.gov.sg with the subject heading “Consultation on Proposed Amendments to the Cess Act. Please submit your views and comments by 13 March 2018.

7. Following the close of the public consultation exercise, a summary of the feedback received will be published. Identities of the respondents will not be disclosed. 

We regret that we will not be able to address or acknowledge every views and comment received. However, all comments received during the consultation exercise will be reviewed thoroughly and, if accepted, will be incorporated into the Bill for introduction in Parliament.

Cess Act Consultation Feedback Form [DOCX, 30 KB]

FAQs for Public Consultation on Proposed Cess Act Amendments [DOCX, 23 KB]