Revenue Forecasting: A Case of Import Duty.

Abstract

Revenue forecasting is an essential part of budgeting in the public sector and, hence, it is necessary for a government to forecast the revenue it collects for planning purposes. This study uses the monthly customs data, in particular the Import duty from January 2003 to December 2010 with the general objective of exploring the data and further establish a suitable forecasting model which can be used to predict the amount of import duty to be collected in a certain specified period. The exploration data analysis revealed that the import duty has an upward/positive trend, has a strong positive correlation over time and that an IMA (1, 1) model was established as a suitable model to forecast the tax.