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  • Trends and latest findings

    The alcohol net tax gap trend has remained steady between 2015–16 and 2018–19 at 9% with very little variation year-on-year.

    Table 1: Alcohol tax gap, 2015–16 to 2018–19

    Element

    2015–16

    2016–17

    2017–18

    2018–19

    Population

    5,267

    5,434

    7,358

    8,227

    Gross gap ($m)

    532

    540

    608

    636

    Amendments ($m)

    3

    4

    47

    55

    Net gap ($m)

    529

    536

    562

    582

    Tax paid ($m)

    5,371

    5,364

    5,629

    5,893

    Theoretical liability ($m)

    5,900

    5,899

    6,191

    6,475

    Gross gap (%)

    9.0

    9.2

    9.8

    9.8

    Net gap (%)

    9.0

    9.1

    9.1

    9.0

    Figure 1 displays the same information as a percentage.

    Figure 1: Net tax gap (percentage) – alcohol tax gap, 2015–16 to 2018–19

     Figure 1 shows the gross and net gap in percentage terms, as outlined in Table 1.

    Our analysis demonstrates that the key driver of the alcohol tax gap is illicit activity.

    There are a number of known illicit alcohol activities and arrangements that have been identified as prevalent in this population. Broadly speaking, these can be categorised into the following behaviours:

    • unauthorised manufacture and unpaid excise duty
    • authorised manufacture with underreported/unpaid excise duty
    • product diversion
    • cross-border transactions (smuggling or export diversion)
    • deliberate fraud or evasion.

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      Last modified: 19 Oct 2021QC 63955