Payment gap estimates
In 2023–24, we estimate long-term non-payment across the tax and superannuation systems to be $5.1 billion, representing approximately 0.7% of total theoretical liability:
- Goods and services tax (GST) is the largest contributor to the payment gap, with an estimated $1.7 billion in long-term non-payment, accounting for 33.8% of the total payment gap.
- Pay as you go (PAYG) withholding is the second largest contributor, at $1.6 billion, representing 30.6% of the payment gap.
- For income tax populations, small business contributes the largest share of long-term non-payment, estimated at $1.2 billion, and representing 24.3% of the total payment gap. Individuals in business account for approximately $0.9 billion of this amount.
Payment gap trends
Overall, the results indicate that most of tax and superannuation liabilities are ultimately paid, with the payment gap remaining between 0.6% and 1.0% of total theoretical liabilities between 2018–19 to 2023–24. The increase in the payment gap to 1.0% in 2021–22 was driven by an increase in GST-related long-term non-payment, coinciding with a spike in activity statement fraud. Since then, the payment gap has declined to 0.7% in 2023–24, reflecting improved payment performance.
Despite some variation across years, long-term non-payment continues to represent only a very small share of total theoretical liabilities.
Figure 4: Long-term non-payment and payment gap estimate across the system, 2018–19 to 2023–24
This data is presented in Table 1.
|
Component |
2018–19 |
2019–20 |
2020–21 |
2021–22 |
2022–23 |
2023–24 |
|---|---|---|---|---|---|---|
|
Total tax gap |
3,439 |
2,968 |
3,832 |
5,724 |
5,092 |
5,067 |
|
GST |
941 |
1,028 |
1,210 |
2,781 |
1,875 |
1,714 |
|
PAYG withholding |
735 |
765 |
977 |
1,215 |
1,484 |
1,553 |
|
Small business |
825 |
661 |
1,211 |
1,176 |
1,106 |
1,232 |
|
Other income based |
841 |
467 |
428 |
536 |
605 |
555 |
|
Other transaction based |
98 |
47 |
6 |
15 |
22 |
13 |
|
Payment gap (%) |
0.7% |
0.6% |
0.7% |
1.0% |
0.8% |
0.7% |
|
Total theoretical liability |
464,324 |
475,508 |
526,193 |
583,230 |
645,568 |
707,048 |
Payment gaps 2023–24
The following charts and corresponding data tables show the breakdown in payment gaps estimated for 2023–24.
Figure 5: Long-term non-payment estimate, transaction-based taxes 2023–24
This data is presented in Table 2.
|
Transaction-based taxes |
Long-term non-payment ($m) |
Theoretical liability ($m) |
Payment gap (%) |
|---|---|---|---|
|
Goods and services tax |
1,714 |
93,070 |
1.84% |
|
Alcohol tax |
8 |
8,817 |
0.09% |
|
Wine equalisation tax |
4 |
1,146 |
0.36% |
|
Luxury car tax |
1 |
1,266 |
0.07% |
|
Fuel excise |
0 |
24,819 |
0.00% |
|
Total |
1,727 |
129,118 |
1.34% |
Figure 6: Long-term non-payment, income-based taxes 2023–24
This data is presented in Table 3.
|
Income-based taxes |
Long-term non-payment ($m) |
Theoretical liability ($m) |
Payment gap (%) |
|---|---|---|---|
|
Small business |
1,232 |
175,468 |
0.70% |
|
Individuals |
372 |
230,108 |
0.16% |
|
Medium business |
85 |
22,559 |
0.38% |
|
High wealth |
47 |
21,107 |
0.23% |
|
Large corporate groups |
26 |
96,348 |
0.03% |
|
Fringe benefits tax |
16 |
6,368 |
0.25% |
|
Small super funds |
9 |
2,541 |
0.36% |
|
Large super funds |
0 |
21,921 |
n/a |
|
Petroleum resource rent tax |
0 |
1,511 |
n/a |
|
Total |
1,787 |
577,930 |
0.31% |
Figure 7: Long-term non-payment estimate, administrative programs 2023–24
This data is presented in Table 4.
|
Administrative programs |
Long-term non-payment ($m) |
Theoretical liability ($m) |
Payment gap (%) |
|---|---|---|---|
|
PAYG withholding |
1,553 |
303,202 |
0.51% |
|
Super guarantee |
336 |
119,118 |
0.28% |
|
Fuel tax credits |
6 |
9,326 |
0.07% |
|
Product stewardship for oil |
0 |
184 |
n/a |
|
Total |
1,895 |
431,829 |
0.44% |