Calling IT vendors to buffer GST hike

I've gone on a mini shopping spree over the last couple of months. Bought a new PDA, a new digital camera, a new hi-fi...

I've gone on a mini shopping spree over the last couple of months. Bought a new PDA, a new digital camera, a new hi-fi...noooo, I didn't win the lottery--one can only hope.

Rather, I've been stocking up in anticipation of the GST (Goods and Service Tax) hike in Singapore, which comes into effect on the first day of July, increasing the overall tax from 5 to 7 percent.

Ok, so I'm only saving some S$30 from my shopping extravaganza but the savings will probably be a lot more significant if you're running a business.

Despite the cost savings though, there doesn't seem to be any buying frenzy among businesses in Singapore, where few are looking to beat next month's tax hike. With some hardware and software purchases running into hundreds of thousands of dollars, a 2 percent saving isn't a paltry sum, especially for the larger companies.

But, if you consider the factors that go into the selection process of any major IT purchase, it's perhaps not a decision most organizations want to rush into even if it means tens of thousands in cost savings.

As IDC analyst Reuben Tan points out, SMBs are likely the ones looking to save some moolah before the impending GST hike comes into effect.

A handful of IT suppliers have stepped up to say they will be absorbing the tax increase for their customers. Singapore's Creative Technology, for example, says it's "happy to play our part for the community" and "lessen the impact" of the impending rise. Good on them, though I'm sure the marketing blitz probably wouldn't hurt the company either.

Several supermarket chains in the island-state have also said they will be buffering the GST increase for between one and six months, in a show of goodwill particularly toward low-income families.

With IT becoming--if it isn't already--an essential part of any business today, shouldn't the major IT suppliers also offer to do the same for their SMB customers?


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