For 2019–20, we estimate a petroleum resource rent tax (PRRT) gap of 1.3% or $13 million. This means over 98% of PRRT was paid.
PRRT gap population
PRRT is typically generated from the sale of oil and gas products, known as marketable petroleum commodities (MPCs). It is calculated on profits made and levied in addition to income tax payable by the owners of petroleum projects. PRRT is paid on:
- stabilised crude oil
- sales gas
- condensate
- liquefied petroleum gas (LPG)
- ethane
- shale oil
- any other product declared by regulation to be an MPC.
PRRT is assessed on a project basis. This means an entity calculates its liability separately for each project interest it holds.
The PRRT gap forms a part of our overall tax performance program. Find out more about the concept of tax gaps and the latest gaps available.
Overview of the latest estimate
For 2019–20, we estimate a gap of 1.3%. We have a high level of coverage of the PRRT client base. We know who these taxpayers are and the projects they are involved in.
Most PRRT taxpayers willingly participate in the PRRT system. They register, lodge, report and pay on time. Complex tax law drives a small tax gap. We see problems with:
- interpretations of assessable receipts
- deductibility and classification of expenditure
- not recognising PRRT and equivalent income tax key concepts.
Table 1 shows the tax reported and tax gap from 2014–15 to 2019–20.
Element |
2014–15 |
2015–16 |
2016–17 |
2017–18 |
2018–19 |
2019–20 |
|---|---|---|---|---|---|---|
Tax gap ($m) |
24 |
14 |
13 |
17 |
19 |
13 |
Tax paid ($m) |
1,244 |
997 |
1,029 |
1,212 |
1,042 |
968 |
Theoretical liability ($m) |
1,268 |
1,011 |
1,042 |
1,229 |
1,062 |
982 |
Tax gap (%) |
1.9% |
1.4% |
1.3% |
1.4% |
1.8% |
1.3% |
Figure 1 shows a trend of the PRRT gap percentages over the same period.
Figure 1: Tax gap percentage – PRRT, 2014–15 to 2019–20