Budget surplus to exceed $6bln in FY2010

Rising tax receipts and a buoyant economy pulled the budget surplus higher, setting the stage for a generous FY2011 budget.

OCBC said the FY2010 budget out-turn is likely to see a primary surplus of around $3.4 billion, which would be the highest budget surplus since 2007 ($6.35 billion). After taking into account the NIIC (originally estimated at $7.83 billion) and Special Transfers of $5.15 billion, this could potentially bring the overall surplus to $6.1 billion for FY2010, approaching the $6.45 billion seen in FY2006, and equivalent to 5.1% of GDP.

For the current term of government, the accumulated overall surplus could swell to $7.5 billion, suggesting that a very generous FY2011 budget could be in store.

The key contributors to the stronger-than-expected FY2010 Budget out-turn are:

a) corporate income tax revenue, which could be as high as 51% above the FY2010 estimate at $11.5 billion;

b) personal income tax revenue, which could be 10% higher than the FY2010 estimate at $7.7 billion; and

c) Goods and Services Tax, which could be 10% higher than the FY2010 estimate at $7.7 billion.

d) Betting taxes, stamp duty, other taxes, and other fees and charges were also lifted by the successful openings of the two Integrated Resorts and the rising property market. With effect from March 2010, betting duty also includes casino tax collected under Section 146 of the Casino Control Act.