• Estimate of the GST gap - overview

    This is the first time the ATO has developed a measurement for the GST gap. Therefore as our understanding of the variables and assumptions affecting the GST gap are refined we will continue to evolve our estimate.

    The ATO derive the GST gap by comparing 'theoretical GST accrual revenue' to 'actual accrual GST revenue' for any financial year. The difference represents the theoretical GST gap. See our methodology for detail.

    The average GST gap from 2001-02 to 2009-10 is 6.7% of GST accrual revenue.

    There was a rise in the GST gap from 5.7% of GST accrual revenue in 2006-07 to 7.0% in 2007-08. The rise was followed by a further rise to 7.6% in 2008-09 and then a fall to 3.3% in 2009-10.

    Based on the methodology, the average GST gap, excluding debt for the period 2008-10, is estimated to be 5.4% of an average accrual GST revenue base of around $44 billion over the period.

    The GST gap, including debt for 2008-10, is estimated to be 6.9% of the accrual revenue base.

    Based on other indicators we use, the rise and fall in the GST gap appear to be temporary for the period 2008-2010 and are due to timing differences in the recognition of items such as dwelling investment and large input-tax credit claims, rather than any significant shift in compliance.

    Therefore in reporting the GST gap we have averaged the two-year period to ensure we give a more accurate reflection of the underlying trend in the GST gap.

    Table 1.1: GST gap, 2001-02 to 2008-10

    Year

    GST gap $m (excluding debt)

    GST gap excluding debt as a percentage of accrual revenue

    GST gap including debt as a percentage of accrual revenue

    2001-02

    2,510

    8.90%

    9.60%

    2002-03

    2,588

    8.30%

    9.20%

    2003-04

    2,243

    6.60%

    7.50%

    2004-05

    2,596

    7.30%

    8.30%

    2005-06

    2,035

    5.40%

    6.40%

    2006-07

    2,295

    5.70%

    6.70%

    2007-08

    2,975

    7.00%

    8.10%

    2008-10 (a)

    2,335

    5.40%

    6.90%

    (a) average GST gap per year for 2008-09 and 2009-10

      Last modified: 13 Nov 2015QC 26611