The Singapore government sourced billions of dollars more than it initially expected from the auction of near-record high car permits, as well as income tax and contributions from its state wealth funds, according to budget data released this week.
The city-state’s national budget showed that vehicle quota premiums brought in S$6.8 billion (US$5 billion) in fiscal 2024, which was S$1.8 billion more than the Ministry of Finance initially expected.
The revenue helped drive the country’s budget into a surplus last year. Singapore is also expecting a surplus of S$6.8 billion for the fiscal year 2025, surprising economists who have expected a deficit around 0.3% of GDP as the ruling party pledges voucher giveaways ahead of a national election.
Vehicle quota premiums have become a key source of revenue for the government, derived largely from the auction of certificates of entitlement. All car owners must bid for these permits to be allowed to drive their car for a maximum of 10 years — a rule that means a Toyota Camry sedan in Singapore can cost almost as much as an Aston Martin Vantage in New York.
While the government has pledged to release more of these permits, which now cost around S$110,000 for larger sedans, it estimates vehicle quota premium revenues will hit a record of S$6.6 billion in fiscal 2025.
The Ministry of Finance has recorded more from this avenue than originally expected from three of the past five fiscal years, according to a review of prior budgets.
State funds
The amount being drawn from Singapore’s state wealth funds and the central bank is also hitting record highs. In fiscal 2024, the government got S$520 million more than estimated a year earlier. That trend is expected to continue, with a forecast increase of 13% to S$27.1 billion for the 2025 fiscal year.
The Net Investment Returns Contribution represents as much as half of the net investment income and up to half of the long term expected real returns of Temasek Holdings Pte, GIC Pte and the Monetary Authority of Singapore.
Personal income tax collected grew by 8.3% to nearly S$30.9 billion in fiscal 2024, mainly due to stronger growth in the Finance, Insurance and Wholesale Trade sectors in 2023, the ministry said. Singapore hiked its goods and services tax to 9% in 2024 to help boost revenue.