We collect GST revenue effectively and efficiently with projections based on Treasury estimates, ensuring revenue outcomes are in line with the economic environment.
Revenue collection
In 2024–25, net GST cash collections (excluding non-general interest charge (GIC) penalties) were $90.2 billion, including net Department of Home Affairs collections of $5.6 billion.
The 2024–25 cash outcome was 6.2% (or $5.3 billion) higher than in 2023–24, reflecting growth in consumption subject to GST over the year. However, this growth was higher than expected, resulting in cash collections being:
- 3.0% (or $2.6 billion) above the estimate for 2024–25 of $87.6 billion published in the 2024–25 Budget
- 1.0% (or $0.9 billion) above the estimate for 2024–25 of $89.3 billion, published in the 2025–26 Budget.
While net GST cash collections were $90.2 billion, net GST accrued on a tax liability method (TLM) was $93.4 billion. TLM is defined as being the earlier of the cash payment being received or the associated liability being recognised. The difference between net GST accruals and cash collections of $3.2 billion, largely reflects increasing debt.
The estimated total statement outcome for June 2024 to May 2025 business activity statements (BAS) due in 2024–25 was $82.8 billion, $4.0 billion higher than the corresponding period in 2023–24. This is mainly due to strength in the financial and insurance services, professional, scientific and technical services and construction sectors.
|
GST revenue |
2020–21 |
2021–22 |
2022–23 |
2023–24 |
2024–25 |
|---|---|---|---|---|---|
|
Total GST accrual |
72,606 |
76,001 |
85,295 |
88,126 |
93,370 |
|
Total GST cash |
73,073 |
73,581 |
81,332 |
84,918 |
90,192 |
|
Net Home Affairs GST cash |
4,774 |
5,692 |
5,683 |
5,337 |
5,582 |
Note: GST Performance Agreement Schedule A 1a. The total GST revenue amount excludes non-GIC penalties.
Measurement and effectiveness
The ATO uses a suite of measures to provide insights into the health and operation of the GST system and the effect of our actions. These performance measures include:
- GST gap
- voluntary compliance ratio (VCR)
- total revenue effects (TRE)
- GST assured.
Three of our performance measures (GST gap, VCR and GST assured) are ‘lag indicators’ that tell us about past performance. We supplement these with the TRE, which measures our current impact on tax collection.
GST gap
The GST gap estimates the difference between GST collected and the amount we would have collected if all taxpayers were fully compliant with tax law (theoretical GST).
There are 2 types of GST gap:
- Gross GST gap – the gap before the impact of our engagement.
- Net GST gap – the gap after our engagement.
The latest estimates indicate an increase in the estimated net tax gap to $8.7 billion in 2023–24 (9.4% of theoretical GST) up from $8.1 billion (9.1%) in 2022–23.
After 2 exceptionally strong years due to the economy rebounding from COVID–19, growth in the estimated GST base moderated in 2023–24 to around 4.2%. This was broadly similar to growth in reported GST liabilities (3.6%) and expected GST collections (3.9%).
The net gap estimates incorporate our best current estimates of debt appropriate for the GST gap. This debt is comprised of estimates of mature non-pursuable debt and debt associated with Operation Protego. As the debt associated with the fraud addressed by Operation Protego is unlikely to ever be paid it has been appropriately included in the gap estimates.
The estimated gross gap is measured before the impact of our compliance activities are considered. The gross gap is estimated to have risen from $11.3 billion in 2022–23 to $11.6 billion in 2023–24. As a share of the estimated GST base, the gross gap was 12.5% in 2023–24, down from 12.7% in 2022–23.
A decline in amendments associated with the type of fraud addressed by Operation Protego has been a moderating influence on the gross gap estimates over both 2022–23 and 2023–24. The underlying level of amendments for recent years appears to have returned to pre 2019–20 levels.
Figure 2.1 Estimated gross and net GST gap (%)
Note: GST Performance Agreement Schedule A 2b–c.
|
Type of measure |
2019–20 |
2020–21 |
2021–22 |
2022–23 |
2023–24 |
|---|---|---|---|---|---|
|
Excluding non-pursuable debt |
3.7 |
1.8 |
2.2 |
6.1 |
6.8 |
|
Including non-pursuable debt |
5.0 |
3.3 |
5.1 |
8.1 |
8.7 |
Note: GST Performance Agreement Schedule A 2a.
ATO action to reduce GST gap
Addressing and influencing taxpayer behaviour to maximise voluntary compliance and minimise GST gap remains a priority.
Taxpayer actions which impact the GST gap continue to range in severity from honest reporting errors to deliberate non-compliance, and include:
- non-reporting of GST
- under-reporting of GST
- over-claiming of refunds including fraudulent claims
- non-payment of GST liabilities.
Our compliance programs target higher-risk industries and taxpayers to provide a balance of prevention, early engagement and assurance activities.
Our focus remains on managing GST compliance risks and behaviours impacting the integrity of the GST. Contemporary technology continues to strengthen our ability to manage GST risks including fraud by:
- improving our risk identification process with earlier detection techniques, enabling us to apply differentiated and tailored treatment strategies
- delivering an automated solution to streamline processes related to managing high-risk refunds
- providing staff with a more holistic view of GST lodgment to support a better client experience when engaging with taxpayers.
Where a BAS lodged online contains an identifiable or likely reporting error, nudge messaging recommending taxpayers check their BAS before lodging their refund is generated.
Previously, legal constraints required GST refunds be processed in 14 days with the expectation that most ATO compliance activity would occur after payment of the refund. Recent legislative changes extended this to 30 days which allows us more time to detect and investigate potential fraud before issuing the refund.
We are committed to helping small businesses to register for GST when required and report their GST transactions accurately. In 2024–25 we commenced work to connect with and help ride-sourcing drivers register for GST and meet their lodgment and payment obligations. These initiatives will continue as part of our ‘helping small businesses get it right’ focus.
We are also being transparent where we are concerned that small businesses are getting it wrong, being opportunistic or deliberate on an ongoing basis. We want to help small businesses set up good habits to get it right and stay on track. This included moving them from reporting quarterly to monthly to embed good business practices and help meet their obligations.
To ensure large businesses pay the right amount of GST and to reduce the gap, we have a combination of one-to-one and one-to-many approaches. These include our justified trust assurance programs and advice and guidance strategies.
From 2024–25, we introduced the supplementary annual GST return for large businesses that received a GST assurance rating through a GST assurance review. With an ongoing GST compliance focus, the annual return information will enable many taxpayers a more tailored and less resource intensive investment for justified trust reviews.
We prevent compliance issues before they arise, by supporting those who want to do the right thing and helping them reduce mistakes through:
- reminders
- nudges
- improved information on our website
- public advice and guidance.
At the same time, we take a firmer approach with those we detect deliberately evading their GST and other tax obligations.
We will continue to work towards closing the gap by:
- building trust and confidence within the community by implementing strategies under the GST Compliance Program
- achieving GST compliance outcomes from other ATO government funded programs, including the Shadow Economy Advisory Forum, Serious Financial Crime Taskforce, Phoenix Taskforce.
Australian tax gaps – overview provides further information on the concept of tax gaps, including why and how we measure them, and a summary of the latest available tax gap data.
GST voluntary compliance ratio
The GST VCR complements the GST gap by measuring the proportion of taxpayers fully compliant with the OECD’s traditional 4 pillars of compliance – registration, lodgment, reporting and payment. For a taxpayer to be deemed fully compliant they must:
- be correctly registered
- lodge by the due date
- report the correct amount of GST
- pay the correct amount on time.
The proportion of taxpayers voluntarily complying with their obligations and the value of GST remitted voluntarily are important indicators of the health of the GST system and community confidence.
The GST VCR is measured at 2 levels:
- Taxpayer level – the number of taxpayers who completely meet all their obligations for the financial year.
- GST value level – the amount of GST that is voluntarily remitted in accordance with the law for the financial year.
Using our strict definition of compliance (which treats even minor unintentional late payments or lodgments as non-compliance), we estimate the VCR for 2023–24 at 45%, down 2% from 2022–23. We continued to see improvements in lodgment compliance in 2023–24, however, it was offset by the increase in the GST gap value. An increased GST gap value results from a reduced number of taxpayers reporting the correct amount of GST.
To account for minor unintentional late payments or lodgments, the relaxed definition adjusts for taxpayers with no total business income or those with one late lodgment or payment. This measure equalled 76% which is consistent with the prior years.
The VCR by GST value equalled 81%. This is higher than the taxpayer level estimate due to the relatively high level of GST compliance from Australia’s largest taxpayers.
Figure 2.2: VCR by GST value and taxpayers
Note: GST Performance Agreement Schedule A 6a–b.
GST total revenue effects
GST total revenue effects (TRE) is a measure of the additional tax revenue collected through the ATO’s compliance activities. These activities include audits, lodgment enforcement and preventative actions, all designed to ensure taxpayers meet their obligations and pay the correct amount of tax.
As shown in Table 2.3, 2024–25 TRE from all activities totalled $3.9 billion (excluding penalties and interest). Table 2.4 shows TRE including penalties and interests totalling $4.1 billion for 2024–25.
Audit actions and incorrect claims stopped
Our target areas of risk across the GST system cover all taxpayer market segments. We continue to focus our compliance efforts on individuals and entities that present a risk by intentionally doing the wrong thing.
Our ongoing investment in data, digital, and fraud prevention capabilities underpins the activities we undertake, including:
- stopping refunds from issuing due to fraudulent, incomplete or incorrect returns
- changing compliance behaviour through claims verification and education, so individuals and small businesses find it easier to comply correctly
- ensuring multinational and large taxpayers pay the right amount.
The estimated revenue effects attributed to our audit actions and incorrect claims stopped in 2024–25 is $1.9 billion (excluding penalties and interest).
Lodgment actions and sustained lodgment
The 2024–25 lodgment program included a strong focus on GST compliance, the shadow economy and illegal phoenix activity. Lodgment activities include a mix of SMS, letters, telephony and firmer actions such as failure to lodge penalties and prosecution referrals.
In 2024–25, lodgment-related activities contributed $930 million (excluding penalties and interest) in TRE. Sustained lodgment compliance following action contributed $425 million (excluding penalties and interest) in TRE, up from $364 million in 2023–24. This is consistent with improved lodge on time results and suggests that more taxpayers are not only increasingly lodging, but also paying on time.
Prevention and sustained compliance
Our prevention TRE estimate primarily relates to system-based nudges (called prompts) that occur in real time when a taxpayer is lodging their activity statements. We can estimate the impact the prompt has on the taxpayers’ compliance behaviour based on whether an adjustment is made following the prompt.
For 2024–25, our estimates for prevention and sustained compliance were $670 million (excluding penalties and interest) in TRE.
Future improvements
We use longstanding methodologies to estimate TRE lodgment and debt collections. While these methods are reliable, we are aligning future methodology with OECD guidance which discounts the revenue we count based on the likelihood that the taxpayer may lodge outstanding returns or pay debts without ATO interaction. We expect to implement this new approach from 2025–26 onwards.
For more information, see Total revenue effects.
|
Category |
2020–21 |
2021–22 |
2022–23 |
2023–24 |
2024–25 |
|---|---|---|---|---|---|
|
Audit actions and incorrect claims stopped |
1,132 |
3,389 |
2,089 |
1,577 |
1,891 |
|
Lodgment actions |
702 |
1,025 |
962 |
889 |
930 |
|
Preventative actions and sustained compliance |
426 |
390 |
398 |
319 |
670 |
|
Sustained lodgment compliance |
370 |
224 |
346 |
364 |
425 |
|
Total |
2,631 |
5,028 |
3,795 |
3,148 |
3,917 |
Note: GST Performance Agreement Schedule A 5a.
|
Category |
2020–21 |
2021–22 |
2022–23 |
2023–24 |
2024–25 |
|---|---|---|---|---|---|
|
Audit actions and incorrect claims stopped |
1,157 |
3,451 |
2,202 |
1,592 |
1,902 |
|
Lodgment actions |
727 |
1,052 |
1,033 |
955 |
1,055 |
|
Preventative actions and sustained compliance |
426 |
390 |
398 |
319 |
670 |
|
Sustained lodgment compliance |
370 |
224 |
346 |
364 |
425 |
|
Total |
2,679 |
5,117 |
3,979 |
3,230 |
4,053 |
Note: The 2024–25 result includes around $586 million in GST collections, with $157 million of voluntary disclosures from large businesses.
|
Category |
2020–21 |
2021–22 |
2022–23 |
2023–24 |
2024–25 |
|---|---|---|---|---|---|
|
Liabilities raised through active compliance |
2,339 |
5,407 |
4,829 |
2,958 |
3,839 |
|
Preventative actions and sustained compliance |
426 |
390 |
398 |
319 |
670 |
|
Sustained lodgment compliance |
370 |
224 |
346 |
364 |
425 |
|
Total liabilities raised |
3,135 |
6,020 |
5,573 |
3,641 |
4,935 |
Note: GST Performance Agreement Schedule A 5a. Liabilities raised include preventative actions in Table 2.3.
|
Category |
2020–21 |
2021–22 |
2022–23 |
2023–24 |
2024–25 |
|---|---|---|---|---|---|
|
Liabilities raised through active compliance |
2,798 |
5,806 |
5,384 |
3,481 |
4,776 |
|
Preventative actions and sustained compliance |
426 |
390 |
398 |
319 |
670 |
|
Sustained lodgment compliance |
370 |
224 |
346 |
364 |
425 |
|
Total liabilities raised |
3,594 |
6,419 |
6,128 |
4,163 |
5,871 |
Note: Liabilities raised include preventative actions in Table 2.3. The 2024–25 result includes around $712 million in GST liabilities, with $252 million of voluntary disclosures from large businesses.
GST assured
GST assured is an estimate of the proportion of tax that we are confident is correct.
Tax assured is based on the concept of ‘justified trust’. GST is assured when, justified trust is achieved and where we have defensible evidence that reporting of GST is complete and accurate.
We collect data to assure tax from a range of direct and indirect sources. We often engage directly with taxpayers (particularly larger businesses) to verify the information they report to us. Most of these engagements are carried out under our justified trust program. Where we cannot gather information to assure tax, we rely on our broader risk management approaches to provide us with confidence over the rest of the total tax reported.
GST results are primarily driven by public and multinational businesses, due to their economic size. For most years, public and multinational businesses account for over 99% of the total GST assured amount in Table 2.7. In 2022–23, there was approximately $7.96 billion of GST assured, approximately 10.3% of the net GST BAS income of $77.0 billion.
It is not practical to assure all tax is correctly reported, and our tax assured estimates will always be lower than the real amount of tax that is correctly reported.
When considered together with our GST tax gap estimates and GST total revenue effects measure, GST assured gives us confidence and valuable insights into the integrity of the GST system that we administer.
For more information, refer to Tax assured: gaining confidence the right amount of tax is reported.
|
Results |
2020–21 |
2021–22 |
2022–23 |
|---|---|---|---|
|
GST assured ($ million) |
8,366 |
9,876 |
7,961 |
|
Net GST BAS outcome ($ million) |
67,387 |
71,120 |
77,048 |
|
Percentage assured (%) |
12.4 |
13.9 |
10.3 |
Note: GST Performance Agreement Schedule A 6c.