Tax Revenues Fall in New Zealand
January 24, 2014 Taxation in New Zealand
WELLINGTON – Tax collections in New Zealand have been lower than expected, but the slowdown has not put a damper on the government’s ambition to reach a budget surplus within 2 years.
On January 24th the Treasury of New Zealand released the Financial Statements of the Government for the first five months of the budgetary year, showing that even though tax collections in the country were slightly below forecast, the tax revenues still showed significant growth, and the deficit of the government’s operating balance shrank, while public expenditure did not increase.
According to the Statements, tax revenue has reached a level of NZD 23.88 billion, but was NZD 514 million, 2.1 percent, below the government’s own forecasts made in December 2013.
The poor performance was attributed to lower-than-expected collection of revenues from corporate income tax, 8.3 percent below expectation, and due to inadequate collection of GST, 2.7 percent below target.
In a Ministerial Summary published alongside the Statements, the Finance Minister Bill English said that despite the below-par results, New Zealand is “…making good progress in putting the Government’s finances on a stronger footing.”
In his commentary he also added that the “… we [New Zealand government] remain on track to surplus in 2014/15, but, as we have said many times before, this remains quite a challenge.”
The new newly published Statements confirm previous speculation of experts and government officials that New Zealand will carry out active measures to begin reducing its sovereign debt within the next three years, and the country is still committed to the plant o reduce government debt a level of less than 20 percent of GDP by 2020.
Photo by: The Chosun Bimbo