We seek feedback and advice on how we estimate the gap from our external and internal subject matter experts. Based on the advice and assessment, the reliability rating for this estimate is medium with a score of 17.
Uncertainty of the economic disruption due to the COVID-19 pandemic and its impact on the shadow economy increases the range of uncertainty to our estimates.
The annual measure of the GST liability is influenced by differences in the timing of sales and purchases across the production chain. This is amplified when there is a sharp reduction in demand.
Our GST tax gap estimates are exposed to all of these influences. We downgraded the reliability rating for last year's GST gap estimates to reflect these influences. As the recovery away from the COVID-19 pandemic continues these influences on the reliability of the ABS data diminishes. For this reason, we have left the reliability unchanged at 17 for this year's estimates. The overall reliability remains medium.
Figure 3: Reliability rating scale – GST gap