We update our tax gap estimates in October each year. This year we are publishing estimates for 19 different gaps
The tax gap can be viewed from 2 perspectives:
- the gross gap – the gap before the revenue impact of our compliance activity has been taken into account
- the net tax gap – the outstanding uncollected amount after considering the impact of our compliance activity
Table 1 below shows our 2020–21 gross and net gap estimates (both as a dollar value and percentage) for the transaction-based tax gaps. It also contains the current reliability assessment ratings for the estimation approaches for all estimates. While some gaps also have an estimate for the financial year of 2021–22 (please refer to Table 4 below for more details), all gaps have estimates for 2020–21. These estimates give us additional insights into the effects of COVID-19 which impacted the final quarter of the 2019–20 and well into 2021–22 financial year.
Tax gap estimate | Reliability assessment rating | Financial year | Gross gap ($m) | Net gap | Gross gap (%) | Net gap |
|---|---|---|---|---|---|---|
Goods and services tax | Medium | 2020–21 | 4,983 | 1,939 | 7.1 | 2.7 |
Luxury car tax | Medium | 2020–21 | 80 | 73 | 8.5 | 7.7 |
Wine equalisation tax | Medium | 2020–21 | 38 | 31 | 3.4 | 2.8 |
Alcohol tax | Medium | 2020–21 | 694 | 691 | 9.0 | 9.0 |
Tobacco tax | Medium | 2020–21 | 3,991 | 1,901 | 21.9 | 10.4 |
Fuel excise | High | 2020–21 | 492 | 492 | 2.5 | 2.5 |
Table 2 below shows our 2020–21 gross and net gap estimates (both as a dollar value and percentage) and their reliability assessment ratings for the income-based taxes.
Tax gap estimate | Reliability assessment rating | Financial year | Gross gap ($m) | Net gap | Gross gap (%) | Net gap |
|---|---|---|---|---|---|---|
Large corporate groups income tax | High | 2020–21 | 4,773 | 3,076 | 6.5 | 4.2 |
Petroleum resource rent tax | Reliable | 2020–21 | n/a | 19 | n/a | 2.0 |
High wealth income tax | High | 2020–21 | 1,222 | 1,078 | 8.1 | 7.1 |
Medium business income tax | Medium | 2020–21 | 1,397 | 1,239 | 8.1 | 7.2 |
Small business income tax | Medium | 2020–21 | 16,187 | 15,092 | 13.7 | 12.8 |
Fringe benefits tax | Low | 2020–21 | 1,308 | 1,275 | 28.9 | 28.2 |
Individuals not in business income tax | High | 2020–21 | 10,940 | 10,201 | 6.8 | 6.3 |
Large super funds income tax | High | 2020–21 | 339 | 278 | 1.5 | 1.2 |
Small super funds income tax | Medium | 2020–21 | 90 | 70 | 4.1 | 3.1 |
The administered programs summary is for programs administered by us on behalf of the community. Table 3 shows the gross and net gap (both as a dollar value and percentage), as well as reliability assessment rating, for each of our gap estimates for selected administered programs for 2020–21.
Gap estimate | Reliability assessment rating | Financial year | Gross gap ($m) | Net gap | Gross gap (%) | Net gap |
|---|---|---|---|---|---|---|
Fuel tax credits | Medium | 2020–21 | 166 | 166 | 2.3 | 2.3 |
PAYG withholding | Medium | 2020–21 | 5,100 | 3,738 | 2.3 | 1.7 |
Product stewardship for oil | High | 2020–21 | n/a | 0.9 | n/a | 0.6 |
Superannuation guarantee | Medium | 2020–21 | 4,421 | 3,619 | 6.2 | 5.1 |
For GST and excise gaps, we have more contemporaneous data which allows us to estimate their tax gaps for 2021–22 as well, see Table 4 below.
Gap estimate | Gap program | Reliability assessment rating | Financial year | Gross gap ($m) | Net gap | Gross gap (%) | Net gap |
|---|---|---|---|---|---|---|---|
Goods and services tax | Transaction-based | Medium | 2021–22 | 8,754 | 2,845 | 11.2 | 3.6 |
Alcohol tax | Transaction-based | Medium | 2021–22 | 747 | 745 | 9.1 | 9.1 |
Tobacco tax | Transaction-based | Medium | 2021–22 | 5,203 | 2,343 | 29.1 | 13.1 |
Fuel excise | Transaction-based | High | 2021–22 | 297 | 297 | 1.7 | 1.7 |
Product stewardship for oil | Administered | High | 2021–22 | n/a | 0.8 | n/a | 0.6 |
Fuel tax credits | Administered | Medium | 2021–22 | 271 | 175 | 4.0 | 2.6 |