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Explanatory notes

Last updated 20 August 2023

Key features under the framework


The indicators have been structured to distinguish between those which are considered to be ‘core’ (or key) and those which are ‘supplementary’ (or complementary). The distinction enables the ATO to drive towards achieving those performance indicators and targets of greatest importance to the Parties to the Performance Agreement. The 2 indicators are:

Core performance indicators


These indicators are defined as key accountability measures. Collectively, core performance indicators enable the ATO to demonstrate it has achieved the desired outcomes for the CFFR. These indicators are base measures and in general would not require change from year to year.

Supplementary indicators


These indicators are defined as providing additional context or information about an area of performance. They are complementary to the core performance indicators by providing additional information on ATO workloads, or output performance, or both. They can also include qualitative or narrative information about an aspect of GST administration. Supplementary indicators may include information on matters such as identified risks, strategies, and treatment outcomes.

International benchmarks


Average and range are based on a mix of reviews with benchmarking partners and represent the latest figures available. These figures will be updated and new benchmarks included as information becomes available.

Maintain compliance

1. Revenue Outcome

1(a) GST revenue


Both the total amount and the Home Affairs amount of GST revenue (cash receipts) are included. In addition, GST accrual revenue is also provided using the tax liability method (TLM).

Under the TLM basis, GST revenue is defined as being the earlier of the cash payment being received or the associated liability being recognised.

All projections are based on the most recently available Budget or Mid-year Economic and Fiscal Outlook (MYEFO) estimates. The purpose of this indicator is to ensure revenue outcomes are moving with the economic environment to provide assurance that the levels of compliance are maintained. Commentary in the GST annual performance report should address this.

2. Trend in GST gap

2(a) Estimated GST gap – by value


This measure estimates the value in $b of theoretical GST losses through non-reporting of GST by businesses and individuals through a failure to register or failure to lodge returns, net under-reporting of GST obligations or over-claiming of GST refunds. The GST gap estimates will relate to the financial year in which the economic activity took place.


The measure is calculated as the difference between the actual tax liability reported to the ATO or raised by the ATO, and the tax liability that should be reported (assuming businesses and individuals fully complied with their GST reporting obligations) for a given period. The calculation is:

 GST gap = theoretical accrual GST revenue − actual (ETM) GST revenue


Accrual revenue is based on the economic transaction method (ETM) and reflects the tax liabilities for the period in which an economic activity actually occurred. This approach facilitates comparison with economic events in the same period, being actual liabilities remitted during the year and an estimate of amounts outstanding that relate to transactions that have occurred in the period but are yet to be reported. Theoretical accrual GST revenue is derived from adjusted national accounts data.


The measure is intended to be viewed as a trend over time and used in conjunction with other indicators utilised by the ATO to measure compliance effectiveness. The absolute dollar gap represents more of a guide to the level of actual tax gap. Random and systematic errors arising from assumptions used to derive the estimate may be present.


The GST gap will be reported in the financial year the gap relates to on an accrual basis.


Full details of the ATO methodology for the GST gap are available on

2(b) Estimated GST gap excluding debt as a percentage of theoretical revenue


This measure shows the percentage GST gap relative to estimated theoretical revenue. It is calculated as: 

GST gap ÷ Theoretical GST revenue × 100


The calculation does not consider the impact of debt on the size of the GST gap.

2(c) Estimated GST gap including debt as a percentage of theoretical revenue


The estimated GST gap including debt is calculated to allow for international comparisons. It represents the GST gap taking into account GST revenue that has not been collected (debt), relative to theoretical accrual GST revenue. Including debt in the calculation reduces the value of actual GST revenue and thereby increases the size of the estimated GST gap.


The calculation is the same as for 2(b) above, however the GST gap figure is adjusted for the debt component. 

GST gap (including debt) = Theoretical GST revenue − (actual accrual GST revenue − debt component)


We use actual non-collectable and provisions based off historical amounts to estimate the value of non-collectable debt.

3. GST debt

3(a) GST debt outstanding


This performance indicator assesses the ATO’s ability to manage its GST debt. The ATO’s client accounting system for activity statement tax obligations features a running account balance. Liabilities for various revenue products including GST are posted to the accounts while credits (payments) are applied to the balance of the account, rather than being matched to individual liabilities. This necessitates the estimation of GST debt. To enable this estimation, a measurement process is undertaken. The process requires the disaggregation of liabilities by heads of revenue for each taxpayer, after exclusion of certain categories and subsequent apportioning of total debits having regard to the sum of each head of revenue. These debit balances by heads of revenue are then summed to allow an attribution percentage to be derived.


This percentage is then applied to activity statement collectable debt, as adjusted to reflect the exclusion of any amounts subject to dispute or insolvency, to derive an estimated collectable GST debt amount. We also separately include estimates of insolvent and disputed debt.

Insolvent debt is the debt of taxpayers subject to some form of insolvency administration. It comprises debts associated with both ATO-initiated and non ATO-initiated insolvency administrations.  

Disputed debt is a term used to describe a tax-related liability, which is subject to an objection, a tribunal review or an appeal. In this context, 'disputed debt' also includes other related components that may arise from the making of the assessment increasing the liability of the taxpayer to tax.

3(b) 12-month rolling average of ratio of collectable debt to GST cash and accruals


The ratio of estimated collectable GST debt to net GST revenue, expressed as a percentage, is a measure used by a number of revenue agencies to gauge their relative effectiveness in managing their debt holdings. The net GST revenue amount is provided by the Revenue Analysis Branch. 

The measure is computed using the estimated GST collectable debt amount as a percentage of 12 months' rolling GST revenue collections.

3(c) GST debt non-pursuit (written-off debt)


The process employed by the ATO in estimating the amount of GST debt non-pursuit includes the following steps:

  • All tax file numbers for taxpayers with write-off postings on their account in the current financial year are identified.
  • For each taxpayer, liabilities by heads of revenue are identified.
  • Each taxpayer’s total liabilities are then divided by the total liabilities for each head of revenue to determine a percentage.


The percentage relating to GST is then applied to total amounts with a write-off posting to provide an estimate of GST debt non-pursuit for that taxpayer. All estimated amounts are then totalled and applied against the sum of all write-off postings to determine an overall percentage for GST debt non-pursuit. This percentage is used to allocate the write-off posting amount from the business system.

GST debt non-pursuit (percentage) is calculated by dividing the estimated amount of GST debt non-pursuit by estimated total GST debt.


Ratio of GST debt non-pursuit to GST revenue – this ratio compares GST debt non-pursuit to GST revenue and is calculated as:

GST debt non-pursuit ÷ Total GST revenue (cash)

3(d) GST on-time payment rate


This measures the compliance level for GST payments and is calculated as:

Number of GST payments paid on time ÷ Total number of GST payments due × 100


Percentage value on-time payment rate is calculated as:

Value of GST payments paid on time ÷ Total value of expected GST payments due × 100

3(e) Ageing of GST debt – value


The age of the debt profile is based on the date of referral of the debt to the ATO’s debt and lodgment case management system. The process does not identify GST debt and the attribution percentage is utilised against each of the age categories to provide an estimation of the age of GST debt.


For the purposes of this measure, the debt base is slightly higher than the overall collectable debt figure as it has not been adjusted. Age profiling is then apportioned to the estimated GST collectable debt figure based on the corresponding proportion of total percentage sourced from the age profiling.

4. Cross-border services and goods

4(a) Value of imported services GST


Australian GST applies to sales of imported services and digital products to Australian consumers. Overseas businesses that meet the A$75,000 registration threshold will need to register for GST, charge GST on sales of imported services and digital products (unless those services or products are GST-free) and lodge returns to the ATO.

This measure calculates the total revenue from payers who report GST either on a BAS or as a LRE (limited registration entity). The LRE is a simplified GST registration option for non-residents.

4(b) Value of low value goods GST


As of 1 July 2018, Australian GST applies to sales of low value goods (less than $1,000) imported by consumers into Australia. Businesses that meet the registration threshold of A$75,000 will need to register for GST, charge GST on sales of low value imported goods (unless they are GST-free) and lodge returns to the ATO.  

These businesses may be merchants who sell goods, electronic distribution platform operators or re-deliverers. For goods imported in a consignment over A$1,000, any GST, customs duty and clearance charges will be charged to the importer at the border under existing processes.

This measure calculates the total revenue from payers who report GST either on a BAS or as a LRE. The LRE is a simplified GST registration option for non-residents.

Client engagement outcomes

5. Client engagement outcomes

5(a) Total GST revenue effects – tax revenue from all GST engagement activities


Total revenue effects is a measure of the impact our activities have on improving taxpayer compliance. These activities ultimately improve levels of willing participation with the GST system. The total revenue effects measure is an estimate of the additional tax revenue that comes from our client engagement activities. It is the combination of both:

  • audit actions and overpayments stopped, and
  • preventive actions and sustained compliance.


Preventive actions and sustained compliance may include:

  • preventive activities (designed to assist or encourage clients to pay the right amount of GST upfront)
  • corrective activities (other than those captured by audit actions and overpayments stopped) designed to encourage clients to review and amend their previous reporting
  • improvements to compliance from preventive or corrective activity (including an audit) conducted in prior periods.

In limited cases, where we can establish a clear causal connection and defensibly measure it, preventive actions and sustained compliance may additionally include the impact of:

  • process changes making it easier for clients to comply with their GST obligations
  • spill-over or ripple effects on the broader population as a result of our broad communications or knowledge of our activities with other clients.


For full details of the ATO methodology for preventive actions and sustained compliance see Total revenue effects measure – impacts of our engagement activities on

5(b) GST compliance liabilities raised by client experience and industry. Cash collections, cash collection rate within the year, and total cash collections.


This indicator provides data on ATO compliance liabilities raised in a financial year, cash collections raised on those liabilities raised in the financial year, cash collection rate, and total cash collections by ATO client experience and industry. Industry is based on industry codes from the Australian and New Zealand Industrial Classification (ANZSIC) codes.


Client experience aligns to ATO categories: Individuals, Small Business, Privately Owned and Wealthy Groups, Public and Multinational Businesses, Not for profit, and Superannuation.


Compliance liabilities are the net value of debit and credit amendments from compliance intervention and include overpayments stopped. Overpayments are also known as 'incorrect refunds'. Compliance liabilities exclude penalties and interest. Due to the running balance account, collections are determined using a combination of actual collections and estimates of collections based on sampling.


Cash collections from client engagement activities are based on those collections within the year that relate to the liabilities raised in that year. This provides the cash collection rate as a percentage of those collections. We also estimate the total cash collections within the year (which can relate to compliance liabilities raised from previous years). Cash collections include penalties and interest.

5(c) Strike rate by client experience


The strike rate (percentage of cases resulting in a liability adjustment by the ATO) is an Organisation for Economic Co-operation and Development (OECD) measure which can indicate the effectiveness of case selection in detecting ‘non-compliance. It should be noted that the measure does not differentiate between upward or downward liability adjustments.


This measure is currently used within the ATO under a broader definition (to encompass not only audit adjustments but where some other outcome has been achieved, for example, de-registration of a taxpayer).


The indicator gives recognition to the ATO’s risk-based audit selection strategy (focused on high-risk clients) and is a more appropriate measure of effectiveness than audit coverage.


It should be noted that the strike rate is likely to have an inverse relationship with audit coverage (for example, risk-based audit selection focuses on high risk and often more resource intensive clients. This results in smaller coverage. As coverage is increased, there is more chance that a higher proportion of less risky clients will be included in the audit selection). It also has a relationship with objections increasing in proportion to the number of audits resulting in adjustments.

Number of finalised audit and enforcement cases in year resulting in an outcome ÷ Total number of finalised audit and enforcement cases in a year × 100

5(d) Refund integrity active compliance liabilities raised and strike rate by client experience


This measure will over time indicate if improvements have been made to the ATO’s risk-based audit selection strategy for refund integrity cases.

5(e) Compulsory GST registrations compared to potential GST registrations based on income tax return data


This indicator assesses whether we have the right number of registrants in the system compared to another source of information. In this case we are comparing the number of entities that declare business income (in excess of $75,000) in their income tax returns with the number of compulsory registrants.

5(f) BAS lodgment


This measure has 2 components: one measures the percentage of business activity statements lodged on time, and the other measures the percentage lodged at a given time. The given time will be at 31 December for the mid-year report and 30 June for the annual (full year) report. The trend in this measure looks at the effectiveness of the ATO in dealing with the lodgment risk (i.e. taxpayers who don’t lodge).

5(g) Estimated return on investment from compliance activities


This measure provides the estimated return on investment of the liabilities raised on GST compliance activities. It compares ratios between ATO business as usual (BAU) and the GST compliance program. The return on investment for the GST compliance program is also shown under Schedule D.

6. Supplementary client engagement indicators

6(a) Voluntary compliance ratio by number of taxpayers


The voluntary compliance ratio (VCR) complements the GST gap by measuring the number of taxpayers fully compliant with all 4 pillars of compliance – registration, lodgment, reporting and payment. To be fully compliant, the taxpayer must be correctly registered, lodge by the due date, report the correct amount of GST and pay the correct amount on time.

This indicator measures the estimated number of taxpayers who meet all their GST obligations for any given financial year, as a proportion of the expected total taxpayer base.

Full details of the ATO methodology for the VCR are available on the website.

6(b) Voluntary compliance ratio by value of GST


The voluntary compliance ratio (VCR) complements the GST gap by measuring the value of GST that is fully compliant with all 4 pillars of compliance – registration, lodgment, reporting and payment. To be fully compliant, the taxpayer must: be correctly registered, lodge by the due date, report the correct amount of GST, pay the correct amount on time.

This indicator measures the estimated amount of GST, by value, which is voluntarily provided to us in accordance with the law, for any given financial year, as a proportion of the expected GST.

Full details of the ATO methodology for the VCR are available on

6(c) Tax assured – proportion of the GST base where the ATO has justified trust that the amount of GST is correct


Tax assured is an estimate of the proportion of tax reported that we are highly confident is correct. This measure is based on the concept of justified trust. Justified trust is a matter of judgment. In determining whether justified trust is achieved, we assess whether objective evidence exists that would lead a reasonable person to conclude the correct amount of tax has been reported. For GST, we examine the total throughput that is correct – i.e. tax paid and credits claimed.


Our broader risk management frameworks including application of industry benchmarks and risk algorithms provide us with a level of confidence over much of the tax reported that we do not formally consider assured for reporting purposes.


For full details of the ATO methodology for tax assured see Tax assured: gaining confidence the right amount of tax is reported on

7. Supplementary dispute resolution indicators

7(a) Number of objections created


An objection is when a taxpayer disagrees with a decision the ATO has made about their tax affairs. This measure provides statistics on the number of GST objections the ATO receives per year, split between audit-initiated and client-initiated objections. The trend in the number of objections can show whether we are improving engagement throughout an audit case, and the communication of the audit decision and continuing improvements in our early engagement strategies.


It should be noted that there is a range of factors that can impact on the number of objections received, including improvements in the strike rate (or improved risk identification).


Audit-initiated objections are where the taxpayer is disputing all or part of a decision made by the tax office as part of an audit activity. 

When a taxpayer lodges an objection to an audit-related decision, they are not necessarily disagreeing with the entire original audit assessment. In most cases, taxpayer objections are usually only against one or a couple of factors from an assessment.


Client-initiated objections are, generally, where the taxpayer has to use the objection process to amend a previous assessment or to seek an extension of time to object.

7(b) Number of objections resolved


This measure provides statistics on the number of GST objections resolved per year, split between audit-initiated and client-initiated objections.

7(c) Audit-to-objection transition rate


The audit-to-objection transition rate provides an indicator of objection levels to audits over time. A decline in this indicator would be consistent with the ATO’s emphasis on preventing and resolving disputes earlier. Resolving disputes earlier has benefits for both taxpayers and the ATO: it saves time, effort and money; it promotes better relationships; and it provides taxpayers with certainty in managing their tax obligations.

Number of objections received in a year ÷ Number of audits with a financial adjustment finalised in year × 100

7(d) Number of new Part IVC litigation cases


Tax disputes can be appealed in the first instance by the taxpayer to the Administrative Appeals Tribunal (AAT) or the Federal Court, with further Appeals to the Federal Court, Full Federal Court and by Special Leave to the High Court. Administrative Matters such as ADJR proceedings are generally appealed directly to the Federal Court. This metric provides data on our new Part IVC Litigation cases for the year, excluding those in the Test Case Litigation Program. When a dispute does reach litigation, our focus is on ensuring that only the right cases are decided in the courts/tribunals, with all other disputes resolved with the taxpayer prior to hearing.


Part IVC first instance cases are those where the taxpayer lodges an AAT or Federal Court application when they are dissatisfied with the Commissioner’s objection decision.


Part IVC appeal cases are when a taxpayer is dissatisfied with an AAT decision or Federal Court decision and appeal to the Federal Court, Full Federal Court or seek special leave to appeal to the High Court.


Administration/other cases are non Part IVC cases where the taxpayer lodges an application with a court (usually the Federal Court). Examples of this include applications under Administrative Decisions (Judicial Review) Act 1977 and declaratory proceedings.

7(e) Number of Part IVC litigation cases resolved


This measure provides the number of litigation cases resolved per year.

7(f) Proportion of objections to new Part IVC litigation cases


This is an ATO-wide information and assistance services performance measure.


This measure is calculated as: Number of first instance matters lodged throughout the period, divided by the number of objections resolved for the same period. It is represented as a number per thousand of objections. This may be an indicator that earlier dispute resolution strategies are resolving disputes before they proceed to litigation.

7(g) Litigation decision outcomes


This is the number of favourable, partially favourable and unfavourable decisions on Part IVC first instance, Appeal and Administrative Matters divided by the total number of decisions for the same period. This measure is designed to indicate that we are only progressing those cases to hearing with strong chances of success or opportunities to clarify the law, in line with our litigation principles.

7(h) Early resolution litigation outcomes


This is the number of Part IVC first instance, Appeal and Administration Matters that have been resolved prior to hearing, divided by the number of finalised cases for the same period. This measure is designed to indicate that we are implementing early resolution processes to ensure we are only progressing those cases to hearing with strong chances of success or opportunities to clarify the law, in line with our litigation principles.

Cost-effective administration

8. Cost effectiveness (cost of collection ratio)

8(a) Cost as a percentage of GST revenue


Projections have been adjusted to reflect revenue estimates (cash receipts) from the most recent MYEFO or Budget.


This measure equates to the cost of collecting $100 of GST revenue. This measure is calculated by:

Total GST collection costs ÷ Total GST revenue cash × 100

8(b) Cost per GST registrant


Projections have been calculated assuming a client base as per indicator 1(c) – total registered client base. This measure is calculated by:

Total GST administration costs ÷ Total registered client base

8(c) Total registered client base by client experience


This is the total registered population at 30 June of the current year. Over time this measure will show how fluid the client base is through GST registrations.

9. Operational and cost management

9(a) Variation of GST administration costs from agreed budget (total administration budget)


This measure reflects the percentage by which the actual GST product cost varies from the agreed budget, as specified in Schedule B. It will be reported retrospectively.

9(b) Client engagement costs as a percentage of total administration costs


This ratio is calculated as:

Client engagement costs [SCF 3.4 and 3.5 Home Affairs] ÷ Total GST administration costs × 100


The GST Compliance Program (Schedule D) costs as a percentage of total administration costs is calculated as:

GST Compliance Program (Schedule D) costs ÷ Total GST administration costs × 100

9(c) Electronic activity statements are finalised in 12 business days


This is a Taxpayer Charter standard. A 94% target applies.

9(d) BAS lodgment method – percentage of BAS lodged electronically


This measure looks at the number of BAS lodged electronically. Our objective is to increase the proportion of BAS lodged electronically to reduce costs and improve the client experience.

9(e) Written technical advice – taxpayer guidance requests and private rulings are finalised in 28 calendar days


Advice and guidance products are issued to help taxpayers understand their obligations and entitlements under the laws administered by the Commissioner. This indicator is an ATO service commitment to respond to enquiries within certain timeframes. An 80% target applies to private rulings. The private rulings standard is subject to the ATO receiving all necessary information. If a request raises particularly complex matters that will take more than 28 calendar days to resolve after receiving all the necessary information, the ATO will aim to contact the taxpayer within 14 calendar days to negotiate a due date.

9(f) Quality of technical advice: Percentage of technical advice cases reviewed rated as achieved for the accuracy of the technical decision/s


This measure uses the ATO Quality Model to determine whether a technical decision made by the ATO was correct for accuracy. The ATO Quality Model was introduced in July 2014 and was adjusted from 1 July 2018. Refinements were made to the assessment of the technical accuracy measure to allow better identification of occurrences where technical answers or decisions made by the ATO were correct (that is, the technical answer or decision made considering the available evidence was correct only), from work which is technically correct but the client experience could be improved.

9(g) Registrations – Australian resident Australian Business Registry Services (ABRS) registrations are finalised in 20 business days


This is a Taxpayer Charter standard. A 93% target applies.

9(h) GST returns filed by intermediaries or tax agents


This is an international benchmark measure which indicates the usage of the tax intermediaries and/or tax agents, or both, for the filing of GST or VAT returns. It is calculated as:

Number of BAS lodged by tax intermediaries or agents ÷ Total number of BAS lodged × 100