There are two types of taxes involved in every business - sales tax and purchase tax.

The sales tax rate in Singapore is at 7%, and the law allows the seller to collect funds known as ‘tax’ from the buyers at any point of purchase. The end consumer pays sales tax for purchasing certain goods and services to the seller. It’s only charged once per every purchase.

On the other hand, the purchase tax is payable by the purchaser. Also known as value-added tax, it is collected by sellers at each stage of the supply chain. Manufacturers, suppliers, distributors, retailers, and end consumers all pay purchase tax on their purchases.