Dr. Eddie Casey:

In the report, we looked a great deal at how the budget forecasts implied a high rise in the effective tax rate. By this we mean that, when the amount of income taxes being collected is divided by the amount of income that is forecast to be generated over the coming years, there seems to be a step change whereby every euro collected in tax was a bit higher than it normally would be for that level of wages. We thought that looked unusual. There could be any number of reasons driving it. When we assessed the issue, it looked like the wage forecasts themselves were a bit low and potentially needed upward revisions whereas the actual tax forecast, which drew on more recent data and was available much closer to now, seemed to be okay and incorporated many of the positive developments that we saw in the middle part of the year and in recent months.