Income Tax Revenue Forecasts: the Specifics

The post-crisis year 2009 saw a sharp drop in the public revenues gained on different levels, low proceeds from the oil and gas sales and the budget deficit. The latter notion has not been around for a long time. At the same time, a unique opportunity has arisen under the circumstances to check the efficiency of and adjust the models used in making forecasts for the coming fiscal year or some other period. Primarily, the quality issues arise when the budget revenues-related forecast is made. It is especially difficult to make profit tax-related and VAT-related forecasts as the taxable base identification procedure is complex because of a large number of tax allowances available to taxpayers. A large number of international experts have examined the revenue forecast models but they have not paid much attention to the profit tax forecast-related issues. The article author examines the advantages and disadvantages of the approaches used when addressing the issue, and identifies the forecast methods that perfectly match today’s economic reality.