Budget 2025: FY2024 revised fiscal surplus widens to S$6.4 billion, boosted by corporate income tax
Better-than-expected performance is partly due to ‘industry-specific cyclical factors’ in finance and wholesale trade
- FY2024 fiscal surplus widens to S$6.4 billion, from earlier estimate of S$0.8 billion
- Estimated primary deficit revised to a surplus, with operating revenue S$8 billion higher than estimated
SINGAPORE’S fiscal surplus for FY2024 has been revised up to S$6.4 billion or 0.9 per cent of gross domestic product, widening sharply from the earlier S$0.8 billion estimate.
This came as operating revenue was revised up by S$8 billion, more than offsetting an upward revision in total expenditure.
Meanwhile, the actual fiscal deficit in FY2023 narrowed to S$2.5 billion, from the revised S$3.6 billion figure.
For FY2024, operating revenue was revised up 7.3 per cent at S$116.6 billion. This was also an increase of 12.7 per cent from FY2023’s actual operating revenue.
The better-than-expected performance was led by corporate income tax, with S$30.9 billion collected, higher than the S$28 billion estimate.
This was partly due to “industry-specific cyclical factors” in finance and wholesale trade, said Finance Minister Lawrence Wong in his Budget speech on Tuesday (Feb 18).
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It could also be due to multinational enterprises choosing to place more of their “high-end activities” in Singapore, he added.
Vehicle quota premiums also exceeded expectations at S$6.5 billion, up from the S$4.7 billion estimate.
Other contributors included goods and services tax (S$20.6 billion, revised from S$19.4 billion) and personal income tax (S$19 billion, revised from S$18.1 billion).
Higher spending
For FY2024, total expenditure was revised upwards by S$1.2 billion or 1 per cent, to S$112.9 billion – 7.2 per cent higher than FY2023’s actual expenditure.
Contributing the most to the change were the Ministry of Defence (S$20.8 billion, revised up from S$20.2 billion) and the Ministry of National Development (S$10.1 billion, from S$9 billion).
Some defence projects were accelerated, while public housing spending increased with higher operating grants to the Housing and Development Board.
In contrast, the Ministry of Health spent S$0.8 billion less than estimated, at S$17.9 billion.
This was mainly due to reduced requirements relating to Covid-19 and lower-than-projected take-up for community care salary enhancement schemes.
With the revisions, FY2024 saw a primary surplus of S$3.7 billion, instead of an earlier estimated primary deficit of S$3.1 billion.
Transfers and top-ups
Special transfers were S$0.1 billion higher than estimated, at S$3.1 billion.
This was driven by the October enhancement of the MediSave Bonus, partially offset by savings from existing schemes.
Top-ups to endowment and trust funds were S$1.7 billion higher than estimated, chiefly due to the Bus Service Enhancement Fund.
Partly offsetting this was the net investment returns contribution, which came in S$0.5 billion higher than expected, at S$24 billion.
All this meant a revised overall budget surplus of S$2.6 billion, instead of the earlier estimated deficit of S$2.9 billion.
Finally, the revised overall fiscal surplus takes into account S$4.2 billion in capitalisation of significant infrastructure and S$0.4 billion in related interest costs and loan expenses.
For FY2023, both actual operating revenue and total expenditure were lower than earlier revised figures.
Operating revenue was S$103.4 billion, down from S$104.3 billion; total expenditure was S$105.3 billion, down from S$106.9 billion.
This meant a narrower primary deficit of S$1.9 billion rather than S$2.6 billion, contributing to the smaller overall fiscal deficit.
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