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  • High wealth income tax gap

    The high wealth income tax gap is an estimate of the difference between the total amount of income tax collected from high wealth private groups and the amount we estimate would have been collected if every one of these taxpayers was fully compliant with the law.

    High wealth private groups are defined as Australian resident individuals who, together with their associates, control wealth of more than $50 million. For the purpose of estimating this gap, we include:

    • registered individuals linked to a high wealth private group
    • companies where ownership by the head individual is 40% or more.

    Companies with total business income greater than $250 million are included in the large corporate groups income tax gap.

    The income of high wealth private groups includes distributions from trusts and partnerships that are part of their structure; these amounts are accounted for as part of this gap estimate.

    In 2016–17, there were approximately 5,000 high wealth private groups with more than $50 million in net wealth. They comprised 9,000 individuals and 18,000 companies. In total, they paid $9.3 billion in income tax and employed 780,000 employees.

    Estimate of the tax gap

    For 2016–17, the net income tax gap estimate for high wealth private groups was $772 million or 7.7%. This means we estimate that high wealth private groups paid more than 92% of the total theoretical tax payable for 2016–17.

    The estimate is an aggregate of the income tax gap for individuals and companies in our population of high wealth private groups. On average, high wealth individuals contribute to 53% of the total net gap and high wealth companies account for slightly less, approximately 47%.

    This is our first release of the income tax gap estimate for the high wealth population. As we calculate additional estimates over future years, we will be able to see clearer long-term trends.

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      Last modified: 12 Mar 2020QC 61748