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  • Trends and latest findings

    The net GST gap estimate has ranged between 7.8% to 10.2% of the theoretical GST liability across the years 2014–15 and 2019–20. The net gap estimate for 2019–20 of $5.3 billion is 7.8% of the total theoretical GST liability and represents a decline of around $175 million from our revised 2018–19 estimate of $5.4 billion (7.8% of theoretical GST revenue for that year).

    Table 1: GST gap, 2014–15 to 2018–19

    Element

    2014–15

    2015–16

    2016–17

    2017–18

    2018–19

    2019–20

    Gross gap ($m)

    7,832

    9,134

    8,452

    7,734

    7,800

    7,560

    Amendments ($m)

    2,520

    2,641

    2,926

    2,419

    2,358

    2,293

    Net gap ($m)

    5,312

    6,493

    5,527

    5,316

    5,442

    5,267

    Tax paid ($m)

    54,579

    57,162

    60,597

    63,240

    64,379

    61,977

    Theoretical liability ($m)

    59,891

    63,656

    66,124

    68,555

    69,821

    67,244

    Gross gap (%)

    13.1

    14.3

    12.8

    11.3

    11.2

    11.2

    Net gap (%)

    8.9

    10.2

    8.4

    7.8

    7.8

    7.8

    Figure 1 displays the gross and net gap as a percentage over the same period.

    Figure 1: Gross and net GST gap percentage, 2014–15 to 2019–20
    Figure 1 shows the gross and net gap in percentage terms, as outlined in Table 1.

    Theoretical GST for 2019–20 was $67.2 billion. This represents a 3.7% decrease from the revised 2018–19 figure. The major components of the theoretical tax base that drove the reduction of GST were:

    • Household consumption for 2019–20 declined by 4.2% compared to 2018–19. This reflects the impact of COVID-19 which has resulted in the first decline in overall household final consumption expenditure (HFCE) in over 60 years and follows an extended period of strong growth (averaging around 3.5% over the previous six years).
    • New dwelling purchases (as indicated by gross fixed capital formation in dwellings) declined by 8.1% in 2019–20 compared to 2018–19. This represents sharply weaker growth compared to recent years and reflects the lowest observed growth rate in new dwelling purchases since 2000–01.

    GST paid was $62 billion for 2019–20. This represents a 3.7% decrease from the revised 2018–19 figure.

    Looking at the components of GST paid in detail:

    • Tax paid voluntarily declined by 3.8% to $59.7 billion in 2019–20, consistent with the decline in net GST revenue in 2019–20 due to lower consumption in the economy.
    • Amendments declined by 2.7% to $2.3 billion in 2019–20, a result of shifting the focus of our usual compliance programs to provide support to taxpayers due to the impacts of COVID-19.

    Voluntary tax paid and amendment figures from 2013–14 to 2019–20 have all been revised using the latest available information (see Table 1).

    Australia’s GST gap estimates are in line with those of similar international tax jurisdictions, including comparable European Union member countries and the United Kingdom.

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      Last modified: 19 Oct 2021QC 57175