Filling the Government coffers

AN UNEXPECTEDLY strong economy last year should translate into a large surplus for the Government. With growth tipped at 7.5 per cent, tax collections probably exceeded projections made a year ago.

Income taxes paid by companies probably surged despite a 2 percentage point cut in the corporate tax rate as businesses enjoyed robust profits amid a buoyant economy.

Personal income tax receipts likely surged amid strong wage growth and record bonuses. The unemployment rate is at a decade low as job creation hits new highs.

Goods and services tax (GST) collections would have been boosted by a 2 percentage point hike in July. A strong economy has also fuelled inflation, further adding to GST receipts as the tax is proportional to prices.

A strong property market means higher collections from stamp duty and other real estate-related taxes.