Budget surplus possibly four times higher than initial estimate: OCBC

That's a whopping $5bn.

Singapore’s FY2012 budget surplus may surprise on the upside, said OCBC Treasury.

"Based on our estimates, the FY12 budget surplus could come in as high as $5b, which if it materializes would be about fourfold of the initial estimated FY12 budget position of $1.27b. This is potential testament to the fact that while headline GDP growth was very modest at 1.2% yoy last year, receipts from corporate and personal income tax, GST, motor vehicle taxes, stamp duty and other fees & charges have been buoyant for the year-to-date FY2012."

Here's more from OCBC:

The top revenue generators remain corporate and personal income taxes and GST which accounted for nearly 55% of total operating revenue. But for the first three quarters of FY2012, motor vehicle taxes, stamp duties, other taxes, and other fees & charges have been running ahead of initial estimates.

COE premiums have risen significantly due to the quota cuts, while stamp duty receipts could have benefited from the strong rebound in the property market prices and record transaction volumes last year despite additional cooling measures, and foreign worker levy were also hiked.

Apart from the personal tax income (+22% yoy over the same period in FY2011), which reflected the very tight and buoyant labor market, the other revenue drivers are partly tied to macroeconomic policies, and could partially explain businesses’ complaints that domestic inflationary pressures remain elevated and hence their expectations that more government incentives and sweeteners are needed to alleviate the challenging climb up the value-chain.

Therefore, economic recalibration could be the main focus for the FY2013 Budget, with productivity and manpower trends under intense scrutiny.