NZ Tax Revenues Below Forecasts
December 6, 2011 New Zealand Taxation
The government’s latest Financial Statements are showing lower than expected tax revenue results.
On December 5th the New Zealand Treasury released the national Monthly Economic Indicators for November 2011 and Tax Outrun Data for October 2011, which summarize the state of the New Zealand economy and the government’s tax take for four months to October 2011.
The total Core Crown tax revenues for the time period were 2.8 percent below the estimates in the 2011 Pre-election Economic and Fiscal Update, at approximately NZD 503 million. The tax revenue level was approximately 1.9 percent above the same period in 2010. The operating balance before gains and losses for the period was NZD 3.36 billion, which is regarded as being adequately close to previous forecasts.
According to the Financial Statements, the national GST revenue levels were 4.7 percent below forecast, at approximately NZD 232 million. However, corporate tax collections were up by 8.6 percent, at approximately 8.6 percent. Source deductions were also 5.8 percent below previous estimates, at a total of NZD 421 million. Fergus Welsh, the Chief Financial Officer of the Treasury, commented on the results, saying that a portion of the lower than expected tax revenues could be attributed to seasonal effects, and would even out over the coming months.
The Finance Minister Bill English issued a statement regarding the tax take, attributing the lower than expected yields to the economic slowdown in Europe. He hinted that further restraints might need to be placed on the government’s spending levels.
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