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Pre-election Economic and Fiscal Update 2014

Treasury and Inland Revenue Tax Forecasts

In line with established practice, Inland Revenue has also prepared a set of tax forecasts, which, like the Treasury's tax forecasts, were based on the Treasury's macroeconomic forecasts. The two sets of forecasts differ from each other because of the different modelling approaches used by the two agencies and the various assumptions and judgements made by the forecasting teams in producing their forecasts.

In this Pre-election Update, the two sets of tax forecasts are quite close to each other by historical standards, with the largest difference in any one year being $324 million (just over 0.1% of GDP). Over the whole forecast period, the Treasury's forecasts are lower than Inland Revenue's. Although there are some offsetting differences across the major tax types, the main point of difference occurs in the forecasts of resident withholding tax on interest.

The following two tables detail the respective forecasts by the Treasury and the IRD for tax revenue and receipts across each of the various sources:

Table 8 Treasury and IRD forecasts of tax revenue (accrual)

Table 9 Treasury and IRD forecasts of tax receipts (cash)

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