TTPI Policy Brief: Assessing the Quality of Government Justifications for Company Tax Receipts Forecasts and Deviations in Australian Budgets

Company tax receipts forecasts and deviations in Australian budgets from 2013-14 to 2017-18: Assessing the quality of government justifications

TTPI Policy Brief 1/2019

Authors:

Miranda Stewart, Professor, University of Melbourne, and Fellow, Tax and Transfer Policy Institute

Teck Chi Wong, Research Assistant, Tax and Transfer Policy Institute

Abstract:

Forecasting tax revenue is an important element of government budgeting. Forecasting is also difficult to do, even by well-resourced countries with strong budget institutions, data and economic and fiscal modelling capacity. Different challenges arise for forecasting of different kinds of taxation and non-taxation revenue, and for overall revenue. This report presents a case study of company tax receipts forecasts and deviations in Australian (national) budgets for the last five completed financial years from 2013- 14 to 2017-18, in the context of overall taxation receipts forecasts. We identify the size of deviations in each year and evaluate the justification provided by the Australian Government for the deviations, based on five criteria developed by the International Budget Partnership (IBP). We also suggest how the Government can improve the way it reports and justifies company tax deviations in the future.

This policy brief is part of a multi-country research initiated by the International Budget Partnership (IBP) to assess budget credibility challenges in different countries, particularly how governments report on and justify budget deviations. Further information about the project is available here.

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