Singapore Scraps Taxes on Gold & Silver

Singapore Scraps Taxes on Gold & Silver
Global_Intergold / Pixabay

Singapore continues to position itself as one of Asia’s leading financial service countries. The Singaporean government is set to repeal the 7 percent tax on Gold and Silver. The previously announced tax count is set to take place today (October 1st, 2012). This move should help Singapore position itself as a world leader in the Gold and Silver trade.

Singapore Scraps Taxes on Gold & Silver

With stock markets, bonds, and other sectors being seen as carrying high-risk, commodity-based trading is becoming more and more attractive for many investors. Since the onset of the 2008 Financial Crisis Gold has risen from under 850 dollars per troy ounce in January of 2008 to over USD 1700 as of October 1 2012. Silver has seen similar gains, rising from about USD 10 in January of 2008 to about USD 35 in as of October 1 2012.

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With governments around the world practicing quantitative easing and numerous other governments on shaky financial grounds investors are flocking towards commodities to hedge against devaluating currencies. By the looks of it, Singapore is looking to cash in on this growing investment trend. With the gold and silver tax repealed investors can now enjoy a strong Sg dollar, easing trading laws, and strong public finances in a booming region.

Singapore now accounts for about 2% of global gold demand but with these moves the Singaporean government hopes to increase that share to 10 to 15%. Singapore has a strong stock market and large Financial Services sector and is now working to expand its share of trade in other investment markets.

Singapore is generally seen as a safe haven for storing wealth. With a stable government, low crime and poverty rates, a world-class infrastructure, and an affluent population, Singapore does not carry the same level of stability risks as its emerging-market neighbors. Unlike similarly affluent Hong Kong, there is no split government and no worry of an authoritarian power, like China’s Communist Party, radically changing policies on a whim.

Singapore also has a reputation for asking few questions. This has been earning Singapore a negative reputation as a money laundering hub and the tiny island nation has found itself in rows with neighboring countries, such as Indonesia, who are accusing it of enabling money laundering throughout the region.

With Singapore so reliant on neighbors for trade, it must carefully balance its ambitions as a growing global financial hub with the needs of its neighbors. So far the Singaporean government has been uncooperative with most international governments but concerted efforts by neighbors or pressure from the larger international community could eventually for the island-state to be more cooperative.

While Singapore will need to be careful that it does not earn the ire of nations around the world for laundering money, the island-state is well-positioned as one of Asia’s leading financial services countries. The city-state also enjoys low personal and business income taxes and has no capital gains

tax. Add in a well-educated workforce and internationally recognized universities and Singapore has the key-ingredients needed to help it become Asia’s leading financial hub.

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