Bill English says the global environment remains uncertain. Photo / Mark Mitchell
New Zealand's corporate tax-take is set to beat expectations this year as the Government reaps more from Portfolio Investment Entities than anticipated, though it faces mounting insurance liabilities from its Accident Compensation Corporation scheme.
The Crown took in $50.54 billion in tax in the 11 months ended May 31, beating
the Treasury's forecast $49.87 billion and helped lead to a smaller operating deficit before gains and losses of $5.91 billion than the $7.04 billion forecast. Core spending was 0.7 per cent below forecast at $61.97 billion.
The bigger revenue stream came from the Government's corporate tax base beating forecasts by 5.1 per cent, with net terminal tax assessments and PIE tax $200 million ahead of expectations.
"This is encouraging, but the global environment remains uncertain, leading to a number of fluctuations in the tax take from month to month," Finance Minister Bill English said in a statement. "This month's accounts continue to be better than forecast, due to ongoing spending discipline and better than expected GST and corporate results."
Still, the Crown's operating deficit was 8.1 per cent worse than anticipated at $10.94 billion, with ACC actuarial losses twice expectations at $3.35 billion, "due to a decrease in the discount rate used to calculate the present value of expected claims payments".
