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  • Annual tax gap findings

    We update our tax gap estimates in October each year. This year we are publishing estimates for 21 different gaps, including the once-off payment gap estimates for the COVID-19 stimulus measures of JobKeeper and cash flow boost. Payment gap estimates are for programs where the government is distributing payments or credits to taxpayers.

    The tax gap can be viewed from 2 perspectives:

    • the gross gap – the gap before the impact of our engagement has been considered
    • the net tax gap – the final uncollected amount after the impact of our action.

    The payment gap can also be viewed from 2 perspectives:

    • the gross gap – the amount of incorrectly distributed payments or credits made before we have undertaken any recovery action
    • the net payment gap – the amount of incorrectly distributed payments or credits that remain outstanding after our action.

    Our latest gross and net gap estimates (both as a dollar value and percentage) for the transaction-based tax gaps are shown in Table 1.

    We also show the tax reported and current reliability assessment for each estimate. While some gaps also have an estimate for the 2020–21 financial year, all gaps have estimates for the 2019–20 financial year. These estimates give us our first insights into the effects of COVID-19 which impacted the final quarter of the 2019–20 financial year.

    Table 1: Transaction-based taxes, latest available data

    Tax gap estimate

    Reliability assessment

    Financial year

    Gross gap ($m)

    Net gap
    ($m)

    Gross gap (%)

    Net gap
    (%)

    Goods and services tax

    Medium

    2020–21

    6,061

    4,138

    8.6

    5.9

    Luxury car tax

    Medium

    2019–20

    28

    22

    4.3

    3.3

    Wine equalisation tax

    Medium

    2019–20

    35.9

    31.6

    3.4

    3.0

    Alcohol tax

    Low

    2019–20

    649

    629

    9.7

    9.4

    Tobacco tax

    Medium

    2020–21

    3,981

    1,891

    21.8

    10.4

    Fuel excise

    High

    2020–21

    475

    475

    2.4

    2.4

    Our latest net gap estimates (both as a dollar value and percentage) for the income-based taxes are shown in Table 2. We also show the tax reported and current reliability assessment for each gap estimate.

    Table 2: Income-based taxes, latest available data

    Tax gap estimate

    Reliability assessment

    Financial year

    Gross gap ($m)

    Net gap
    ($m)

    Gross gap (%)

    Net gap
    (%)

    Large corporate groups income tax

    High

    2019–20

    4,561

    2,580

    7.4

    4.2

    Petroleum resource rent tax

    Reliable

    2019–20

    n/a

    13

    n/a

    1.3

    High wealth income tax

    High

    2019–20

    812

    737

    7.4

    6.7

    Medium business income tax

    Medium

    2019–20

    1,198

    994

    8.4

    7.0

    Small business income tax

    Medium

    2019–20

    12,872

    11,886

    12.6

    11.6

    Fringe benefits tax

    Medium

    2019–20

    1,016

    991

    20.8

    20.3

    Individuals not in business income tax

    High

    2019–20

    9,673

    9,030

    6.0

    5.6

    Large super funds income tax

    High

    2019–20

    378

    230

    3.2

    1.9

    Small super funds income tax

    Low

    2019–20

    56

    37

    3.2

    2.1

    The administered programs summary is for programs administered by us on behalf of the community. These differ from the categories above in that they are not taxes. JobKeeper and cash flow boost were programs to support the community through COVID-19. These programs were temporary and will not be estimated again.

    Table 3 shows the gross and net gap both as a dollar value and percentage for each of our gap estimates for selected administered programs, for the latest year of available data.

    Table 3: Administered programs, latest available data

    Gap estimate 

    Reliability assessment

    Financial year

    Gross gap ($m)

    Net gap
    ($m)

    Gros gap (%)

    Net gap
    (%)

    Fuel tax credits

    Low

    2019–20

    15.1

    13.3

    0.2

    0.2

    PAYG withholding

    Medium

    2019–20

    5,616

    3,371

    2.6

    1.5

    Product stewardship for oil

    High

    2020–21

    n/a

    0.27

    n/a

    0.18

    Superannuation guarantee

    Medium

    2019–20

    4,045

    3,374

    5.9

    4.9

    JobKeeper

    Reliable

    April 2020 to March 2021

    2,588

    2,180

    2.8

    2.4

    Cash flow boost

    Reliable

    Start of March quarter to end of June quarter 2020

    1,040

    943

    2.9

    2.7

      Last modified: 31 Oct 2022QC 53161