For 2021–22, we estimate a net gap for large super funds of 1.4% or $195 million. This means we expect to collect over 98% of the income tax that should be paid for the 2021–22 financial year.
Large super funds population
In tax gap estimates, the large super population is all super funds, other than the self-managed super funds (SMSFs) and Small Australian Prudential Regulatory Authority (APRA) funds. Large super funds have thousands or millions of members. Small APRA funds (not included in this analysis) have no more than 6 members and have similar characteristics to SMSFs. These funds are covered in our Small super funds income tax gap.
This gap forms a part of our overall tax performance program. Find out more about the concept of tax gaps and the latest gaps available.
Overview of the latest estimate
The gross gap has continued to be relatively low over the last 6 years, at 3% or below. For 2021–22, we estimate a gross gap of 2% or $275 million, which is the gap prior to considering the impact of engagement with the ATO. It means 98% is expected to be collected voluntarily from large super funds, or around $13 billion of income tax.
The net tax gap estimate is 1.4%, which means expected collections from large super funds, after amendments, is approaching 99%. Key drivers of these amendments include:
- structured arrangements providing imputation benefits from Australian shares not held (including enhanced share buy backs participation arrangements)
- foreign income tax offsets and source of hedging gains
- apportionment of non-deductible expenses.
Table 1 shows the tax reported, adjustments, gross and net gaps from 2016–17 to 2021–22.
Element | 2016–17 | 2017–18 | 2018–19 | 2019–20 | 2020–21 | 2021-2022 |
|---|---|---|---|---|---|---|
Population | 290 | 266 | 246 | 227 | 213 | 191 |
Gross gap ($m) | 330 | 198 | 256 | 227 | 261 | 275 |
Amendments ($m) | 119 | 121 | 131 | 91 | 59 | 80 |
Net gap ($m) | 210 | 77 | 125 | 136 | 203 | 195 |
Expected collections ($m) | 11,101 | 12,025 | 8,431 | 11,688 | 21,943 | 13,508 |
Theoretical liability ($m) | 11,311 | 12,102 | 8,555 | 11,825 | 22,145 | 13,704 |
Gross gap (%) | 2.9% | 1.6% | 3.0% | 1.9% | 1.2% | 2.0% |
Net gap (%) | 1.9% | 0.6% | 1.5% | 1.2% | 0.9% | 1.4% |
Figure 1: Gross and net income tax gap percentage – large super funds, 2016–17 to 2021–22