Tax Revenue Forecasting Methods and Budget Planning in Cross River State

This research investigates the methods used to forecast tax revenue and their accuracy in supporting budget planning in Cross River State, South South Nigeria. Sound revenue forecasting is a prerequisite for credible budgeting: unrealistic projections lead to expenditure shortfalls, programme disruptions, and accumulation of unpaid liabilities. Cross River State, with an economy driven by tourism, agriculture, and cross-border trade, presents an interesting case for examining forecasting methodology adaptation to subnational conditions. Using a mixed documentary and qualitative design, the study reviews Cross River State's annual budget documents and end-of-year fiscal reports from five consecutive years, comparing actual revenue outturns with budgeted projections. Interviews with eight budget officers and revenue officials from the state Ministry of Finance and Internal Revenue Service provide qualitative data on forecasting methods used. Quantitative analysis employs variance analysis and mean absolute percentage error calculations. The study expects to find that overly optimistic IGR projections, often driven by political pressure rather than technical analysis, are a recurring feature of Cross River's budget cycle, contributing to implementation gaps. Recommendations include adopting macro-econometric revenue forecasting models calibrated to state-level economic data, establishing an independent revenue advisory committee to validate budget projections, and publishing multi-year revenue forecasts alongside annual budgets. Keywords: tax revenue forecasting, budget planning, Cross River State, IGR, fiscal management.