Budget 2025: FY2024 revised fiscal surplus widens to S$6.4 billion, boosted by corporate income tax

• 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).

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).

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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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