26 July 2018

On 9 July 2018, the Customs (Amendment) Bill (“Bill”) was passed in Parliament. The Bill aims to support policy changes on fuel taxes, improve the operational efficiency of Singapore Customs and provide legal clarity on current policies.

The key changes to the Customs Act will be as follows:

  • Support policy changes on fuel tax: By way of background, diesel taxes were restructured in Budget 2017, with the introduction of a volume-based duty on automotive diesel, industrial diesel, and the diesel component in biodiesel. At the same time, the existing lump sum special tax on diesel vehicles was reduced. The shift from a lump sum tax to a usage-based tax was to incentivise users to reduce diesel consumption. To support these tax changes, the Bill will amend the Customs Act to:
    • broaden the definition of “motor fuel” to include diesel and any other fuel that may be used to power a means of transport; 
    • clarify the processes by which Singapore Customs will deal with changes to the rate of special taxes for motor vehicles;
    • give Singapore Customs officers the discretion to let vehicles which have flouted the three-quarter tank rule, but cannot U-turn at the checkpoint, to leave Singapore after imposing the fine.
  • Provide legal clarity on current policies: The relevant amendments seek to:
    • clarify that there will be collection of customs or excise duties and import goods and services tax (GST) for goods used or consumed in a Free Trade Zone (“FTZ”);
    • give Singapore Customs the flexibility to re-impose duties on goods which cease to be duty-exempt, based on the value at the time of importation or at the time the exemptions cease.
  • Improve operational efficiency: To ensure Singapore Customs remains operationally effective in its administration of the Customs Act, the Bill will amend the Customs Act to:
    • extend the time limit for the recovery of short-levied and erroneously refunded duties, taxes, or other charges from one to five years, and remove the time limit for the recovery of duties due to fraud and wilful default;
    • extend the time limit for submission of claims for refund of duties, taxes, or other charges overpaid or erroneously collected from one to five years.

Reference materials

The following materials are available on the Parliament website www.parliament.gov.sg and the Ministry of Finance website www.mof.gov.sg:


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