The overall progress of tobacco tax policy implementation:
- Relationship between tobacco taxes, price and public health
Tobacco tax as percentage of retail prices in Singapore is 67.50%, considered to be the third highest tobacco burden in the region. Singapore has regular adjustment process or procedure to periodic revaluate of tobacco tax. The aim is to reduce smoking prevalence, and tobacco products do not become more affordable over time.
Singapore implements a specific tax rate of SGD 0.427/stick on cigarettes. In addition, 7% Goods and Services Tax (GST) is imposed on tobacco products.
- Level of tax rates to apply
The Singapore Customs regularly review the excise duty on tobacco products. In 2018, the Customs increased the excise duty on cigarettes and other tobacco products by 10%. For example, the excise duty on cigarettes increased from SGD 388 per kg or 38.8 cents per gram or part thereof of each stick of cigarette, to SGD 427 per kg or 42.7 cents per gram or part thereof of each stick of cigarette. The level of tax rate in Singapore is high enough to reduce affordability of tobacco products. However, there is more room to improve as the current tobacco tax rates are varied between product types, which may cause product shifting among consumers.
- Comprehensiveness/similar tax burden for different tobacco products
The government does not tax all tobacco products in a comparable way. The current specific tax rates are imposed on 4 main different types of product: 1.) Cigarette, 2.) Unmanufactured tobacco, and 3.) Bidi ang hoon, and 4.) Other manufactured tobacco. It results in the risk of shifting in consumption pattern among consumers.
Singapore requires licenses for: manufacture of tobacco products and manufacturing equipment under the Customs Act; import or export of tobacco products and manufacturing equipment under the Customs Act; retailing of tobacco products under the Health Sciences Authority (HSA), and wholesaling, brokering, warehousing or distribution of tobacco and tobacco products or manufacturing equipment under the Customs Act while the import, retail and distribution of tobacco products is regulated under the Tobacco (Control of Advertisements and Sale) Act (TCASA). Singapore does not have tobacco growing in the country, therefore, the tobacco growing license do not exist.
- Warehouse system/movement of excisable goods and tax payments
The government imposes excise taxes at the point of manufacture and importation under the Customs Act. The excise duty is levied at the time the tobacco products are imported into the customs territory or manufactured in Singapore. However, traders can store dutiable goods in licensed warehouses with duty suspended. The excise duty will be payable when the goods are released from the licensed warehouses for local consumption. Tax payments are required by law to be remitted at fixed intervals or on a fixed date each month, which categorizes into: (a) For tobacco products stored in a licensed warehouse, excise duty shall be paid at the time the goods are removed from the licensed warehouse and the licensees are not required to submit any of the mentioned reports to Customs for tax payment purpose; and, (b) In any other case, tax shall be paid at the time the tobacco products are imported into Singapore. The tax payable amount will be auto-computed by the system (TradeNet) based on the HS code and quantity inputted by the declaring agent. Tax authorities allow for the public disclosure of the information contained within the report submitted by the tobacco companies (under Section 89 of the Customs Act).
- Anti-forestalling measures
Singapore applies anti-forestalling measures since the tax increases are applied on the same day as announcement.
- Fiscal markings
Singapore does not enforce tax stamps as fiscal markings. However, since 1 Jan 2009, all individual sticks of cigarettes meant for sale and consumption in Singapore are required to bear the SDPC mark.
Singapore clearly designates and grants appropriate powers to tax enforcement authorities. The Singapore Customs is the main authority to enforce excise duty policy and regulations. There is information sharing among enforcement authorities which is governed under Section 89 of the Customs Act.
- Use of revenues – financing of tobacco control
Singapore does not have a regulation to dedicate tobacco tax revenue to tobacco-control programs, such as those covering awareness raising, health promotion and disease prevention, cessation services, economically viable alternative activities, and financing of appropriate structures for tobacco control. The tobacco control activities are funded by the Ministry of Health.
- Tax-free/Duty-free sales
Singapore prohibits duty-free sale of tobacco products since 1991 and no duty-fee sale of tobacco is allowed for incoming travelers/passengers.
- Protection of tax policies from vested interests
Although Singapore does not consult with the tobacco industry in the development of public policies, the Tobacco Association is invited to submit feedback when there are public consultations on tobacco control measures. They may also submit feedback during the pre-budget consultation exercise.