Document Type

Policy Paper

Publication Date

Fall 2016

Publication Title

The Economic and Social Review


This paper examines the tax revenue forecasting performance of the Department of Finance over the period 1997-2014. While the general forecasting framework used reflects standard international practice, forecasting errors are relatively large by international standards. In almost all cases, we find no evidence of bias in the forecasts when considering the major tax heads over various forecast horizons. A decomposition of the forecast errors reveals substantial contributions from sources other than errors in forecasting the macroeconomic environment or in estimating the previous year’s revenue outturn. This suggests that a formal review of specific procedures and assumptions by the Department could yield further improvements in forecasting performance. An innovative exercise examining the routine use of judgement by the Department to adjust the outcome of forecasting equations indicates that this practice often improved the quality of the forecasts.





First Page


Last Page



© Irish Fiscal Advisory Council 2015


Archived as published.

Open Access. Part of PKP (Public Knowledge Project), Open Journal System.

Included in

Economics Commons



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.