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  • Total revenue effects measure – impacts of our engagement activities

    Total revenue effects:

    • is one indicator we use to monitor and understand the impacts of our activities on the performance and operation of the tax and super systems.
    • is a measure of the impact our activities have on improving taxpayer compliance.

    It is a combination of:

    Audit yield

    Audit yield is the collection of specifically identified liabilities raised and the reduction in overpayments of refunds from our audit and enforcement activities. These amounts are directly connected to the adjustment we make, and payment can occur after we conduct the audit. It also includes interest and penalties.

    Wider revenue effects

    Wider revenue effects are an estimate of the additional revenue received from taxpayers we influence. They typically represent improved voluntary compliance. When measuring wider revenue effects, we ensure there is a clear connection between our activity and the change in taxpayer behaviour. This connection, and any assumptions that underpin it, must be reasonable and defensible.

    Note: Both audit yield and wider revenue effects are reported on a cash basis rather than accrual basis. This recognises the impact of our activity when the additional revenue is paid by the taxpayer.

    Stimulus compliance outcomes

    For the 2020-21 year, total revenue effects also includes the impact of stimulus-related compliance activities that prevent and recover overpayments related to JobKeeper and Cash flow boost.

    The estimates relate only to our compliance activities and do not include:

    • voluntary returns of stimulus payments, or
    • the impact of unprompted self-amendments to reduce overpayments.

    Results

    Our current methods are designed to:

    • estimate the revenue effects of improvements to compliance historically, or
    • follow our engagement with taxpayers and their registered tax or BAS agents (including corrective and preventative work).

    We estimated our 2020–21 total revenue effects to be $11.5 billion.

    Table 1: Total revenue effects, 2016–17 to 2020–21 ($ billion)

    Annual report

    Audit yield
    ($b)

    Wider revenue effects
    ($b)

    Stimulus compliance outcomes ($b)

    Total revenue effects
    ($b)

    2016–17

    10.2

    4.8

     

    15.0

    2017–18

    11.8

    4.2

     

    16.0

    2018–19

    10.5

    4.8

     

    15.3

    2019–20

    9.5

    4.3

     

    13.7

    2020–21

    6.8

    3.5

    1.2

    11.5

    Note: Amounts are rounded to the nearest $100 million.

    Limitations

    Measuring total revenue effects is complicated. There are technical limitations involved in establishing defensible causal connections between our engagements with taxpayers and any improvements to compliance.

    Even when we establish a causal connection, it can be difficult to understand and identify where our activities resulted in a revenue effect outcome, or an external factor unrelated to us.

    Therefore, we do not yet estimate a wider revenue effect for several strategies and products, such as our help services (including information on our website) used by millions of taxpayers to understand and meet their tax obligations.

    Changes

    Statistical methods used to estimate components of the total wider revenue effects may be subject to revision or improvement as a result of new or refined methods being developed. We continually review our methods to better understand our impact on improving voluntary compliance and sustainably reducing the tax gap.

    This year, we have used a new model to estimate wider revenue effects for individuals subject to pre-lodgment and post-lodgment interactions. The result of this model is a reduction in the total wider revenue effect by more than $900 million. When models will be substantially revised or when new models are developed, these changes will be detailed in this web content.

    See also:

      Last modified: 19 Oct 2021QC 53795