THERE is still “considerable uncertainty” about how government revenues will trend over the coming years, said Finance Minister Lawrence Wong on Tuesday (Feb 18).
“At this juncture, it is too early to determine if the recent increase in corporate income tax collections is temporary or a lasting trend,” he said.
Wong, who is also the prime minister, said that there could be additional corporate income tax revenue from financial year 2027 onwards with the implementation of the domestic top-up tax. The domestic top-up tax is expected to raise large multinationals’ effective tax rate to 15 per cent.
However, he added that how much revenue Singapore gets from this change depends on whether multinationals continue to find it attractive to remain in the country.
PM Wong also noted that there is now great uncertainty about the global tax environment.
“The new US administration has withdrawn from the earlier consensus forged by the OECD (Organisation for Economic Co-operation and Development) and other countries,” he said, adding that it remains to be seen what further moves the US and other major economies make in this new geopolitical environment.
As for the nation’s expenditure, PM Wong said that it is certain that spending will rise. He noted that government spending has risen steadily from about 15 per cent of gross domestic product to about 18 per cent.
By 2030, he expects the government’s expenditure to go up to 20 per cent of GDP.
“We will continue to monitor fiscal trends closely and update our medium-term projections.
“Ultimately, we will always ensure that all Singaporeans benefit from the nation’s progress,” he said.
The estimated overall fiscal position of financial year 2025 stands at a surplus of S$6.8 billion, while the overall expenditure stood at S$143.1 billion, or 18.7 per cent of GDP.
This compares to a revised financial year 2025 overall fiscal surplus of S$6.4 billion, with overall expenditure coming up to S$134.2 billion, or 18 per cent of GDP.
For more Budget stories, visit businesstimes.com.sg/singapore-budget-2025
