Budget 2025: Unexpected rise in corporate income tax boosts government revenue
This is partly due to industry-specific cyclical factors, such as in finance and wholesale trade
AN UNEXPECTED rise in Singapore’s corporate income tax collection boosted the city-state’s revenue for financial year 2024, said Finance Minister Lawrence Wong in his Budget speech on Tuesday (Feb 18).
Corporate income tax is now the single largest contributor to Singapore’s total revenue, larger than even the net investment returns contribution, said Wong, who is also the prime minister.
Collections for corporate income tax increased significantly in the last two years, and are projected to reach 4.1 per cent of Singapore’s gross domestic product in FY2024.
This is partly due to industry-specific cyclical factors, such as in finance and wholesale trade, Wong noted.
“It could also be due to changes in the investment decisions of multinational enterprises, as they seek out stable and reliable centres like Singapore to put more of their high-end activities,” he added.
While revenue collections were “better than expected”, Wong said that the government has also spent more on Singaporeans, such as providing S$3 billion in MediSave top-ups in December to help cushion increases in MediShield Life premiums.
Resources were also earmarked for projects to boost economic competitiveness, including Changi Terminal 5 and for the energy transition.
Overall, PM Wong expects to end FY2024 with a surplus of S$6.4 billion, or 0.9 per cent of GDP.
FY2025 should have a similar fiscal position with a surplus of S$6.8 billion, or 0.9 per cent of GDP.
For more Budget stories, visit businesstimes.com.sg/singapore-budget-2025
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