For 2019–20, we estimate a net gap of 2.1% or $37 million. This means small super funds paid around 98% of the tax we should expect.
Small super funds population
For this analysis, we define small super funds as those with no more than 6 members. The small super fund lodged population for 2019–20 consists of approximately:
- 524,000 self-managed super funds (SMSFs)
- 1,600 small Australian Prudential Regulation Authority regulated funds.
This gap forms a part of our overall tax performance program. Find out more about the concept of tax gaps and the latest gaps available.
Overview of the latest estimate
This year's gap estimate uses the data reported to us for the 2019–20 tax year. This includes the registered population, lodged population, amendments and the tax paid.
We are working to better understand compliance with income tax obligations particularly during and after COVID-19. This will be reflected in next year's gap estimate. We have chosen not to change the data that underpins assumptions about compliance until this is completed.
This means our 2019–20 estimate does not reflect any new compliance work or potential changes in compliance behaviour. Because of this, the reliability of this gap is low.
The small super funds income tax gap has remained steady over the 6-year period.
The gap is mostly the result of errors in reporting:
- contributions
- net capital gains
- trust distributions
- exempt current pension income.
The non-lodging population contributes to the gap with the total funds not lodging an SMSF annual return increasing each year.
Table 1 shows the dollar values at the various elements involved in calculating the gap for 2014–15 to 2019–20. The gross and net gaps are also shown as percentages.
Element |
2014–15 |
2015–16 |
2016–17 |
2017–18 |
2018–19 |
2019–20 |
|---|---|---|---|---|---|---|
Population |
521,959 |
534,766 |
547,023 |
549,772 |
543,633 |
525,544 |
Gross gap ($m) |
49 |
55 |
66 |
55 |
55 |
56 |
Adjustments ($m) |
16 |
19 |
23 |
19 |
19 |
19 |
Net gap ($m) |
33 |
36 |
43 |
36 |
36 |
37 |
Tax paid ($m) |
1,493 |
1,342 |
1,453 |
1,716 |
1,571 |
1,713 |
Theoretical liability |
1,525 |
1,379 |
1,497 |
1,752 |
1,608 |
1,750 |
Gross gap (%) |
3.2 |
4.0 |
4.4 |
3.2 |
3.4 |
3.2 |
Net gap (%) |
2.1 |
2.6 |
2.9 |
2.1 |
2.3 |
2.1 |
Figure 1: Gross and net tax gap percentage – small super funds, 2014–15 to 2019–20