Tax Revenue Forecasting in Austria. Anton Rainer Ministry of Finance

Transcription

1 Tax Revenue Forecasting in Austria Anton Rainer Ministry of Finance

2 AUSTRIA km² 8,4 million inhabitants Federal Republic with 9 Länder (states) with Communities GDP 2011: 302 G per capita

3 Austrian Taxes 2010 billion Taxes + Social Contributions 120,53 42,1% of GDP of which Social Contributions 42,057 14,7% of GDP Taxes 78,474 27,4% of GDP of which "Federal Taxes" 65,492 83,5% of Taxes

4 Most Important Federal Taxes (million ) Value-added Tax Wage Tax Corporate Tax Mineral Oil Tax Assessed Income Tax Motor Vehicle (Insurance) Tax Tobacco Tax Capital Yields Tax on Dividends Capital Yields Tax on Interest Insurance Tax Other Taxes Sum of Federal Taxes Share of 5 highest taxes 82,6% 82,1% Share of 10 highest taxes 92,7% 92,1% Tax Shares to Länder, Communities, Funds, EU ,2% 40,0%

5 Obligatory Forecasts according to Federal Household Law Forecasts Annual Budget September of preceding year Monthly Budget 1 1/2 months in advance Financial Frame (for the following four years) March/April Other Forecasts mostly for the current and following year, sometimes also mid-term e.g. if economic forecasts change, for budget reports to EU etc. seldom: long-term projections

6 Estimates for Proposed or Planned Tax Measures Revenue effects of Tax Reforms Consolidation Tax Measures Proposals from other Institutions (Ministries, Parties, Chambers, Parliament, Universities) Decisions of High Courts mostly in cooperation with the special tax division

7 Methods For annual revenue forecasting (budget, mid-term) (technical) projection for current year elasticities related to the latest economic forecasts of WIFO and IHS *) adding/deducting effects of legal or administrative changes correcting for timing aspects For monthly budgeting estimates mainly on the seasonal patterns of past years (adjusted for lagged effects of legal/administrative changes) adjusted if past months were different from expectations For long-term projections simply assuming constant relation between GDP and tax revenue WIFO..Austrian Institute for Economic Research IHS..Institute for Advanced Studies

8 Elasticities relative to Value-added Tax internal private consumption = domestic private consumption + tourism (net) Wage Tax different for per-capita wage/salary and number of employees Corporate and Assessed Income Tax rough estimate of 3 preceding years' profits Mineral Oil Tax weak connection to real GDP Capital Yields Tax on Distributed Profits profits of preceding year Capital Yields Tax on Interest interest rate forecast + estimate of financial assets Most other Taxes trend forecasts

9 Personal Income Tax consisting of quite inhomogeneous components Assessed Income Tax for persons with non-wage income - Net of employees assessments - Negative tax for those with no or low income - Tax Expenditures (children s tax credits, savings premiums, R&D premiums)

10 Assessed PIT and CIT Tax declaration until end of March of following year, but if represented by a tax lawyer March of second following year Unless the tax for a year not (fully) paid until end of September of the following year, the tax payer has to pay interest on the open amount (independent of declaration and assessment) Tax prepayments (quarterly) on the base of latest assessment: amount prescribed +4% if lag is one year (+5% for each year for longer lags) Prepayments are adjusted, if assessment is finished before end of September, otherwise the change takes place from the beginning of the following year Revenue (R) = lagged function of assessments (A) of preceding years Simplest version, if there is a regular assessment lag of one year: R = 2,04*A -1 1,04*A -2

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15 Comparison Forecast Outcome ( ) Value-added Tax %-Difference OC-FC: Mean -0,8% StDev 2,5% OLS-Estimate: OC = -210(423) + 1,004(0,024)*FC R²=0,988 Wage Tax %-Difference OC-FC: Mean 0,6% StDev 2,9% OLS-Estimate: OC = -165(309) + 1,019(0,020)*FC R²=0,992 Corporate Tax %-Difference OC-FC: Mean 4,8% StDev 13,7% OLS-Estimate: OC = -9(281) + 1,057(0,077)*FC R²=0,900 Assessed Income Tax %-Difference OC-FC: Mean 1,3% StDev 11,4% OLS-Estimate: OC = 775(433) + 0,718(0,160)*FC R²=0,489 Mineral Oil Tax %-Difference OC-FC: Mean 1,5% StDev 3,9% OLS-Estimate: OC = 132(76) + 0,964(0,026)*FC R²=0,985 Sum of Total Taxes %-Difference OC-FC: Mean 0,4% StDev 2,3% OLS-Estimate: OC = -827(1083) + 1,022(0,021)*FC R²=0,991