How to interpret the results

The tax gap estimates need to be interpreted and used carefully. The estimates include margins of error which are difficult to quantify, but may be material. In this regard, it is important to recognise that tax gap estimation is fundamentally an exercise in measuring the unobservable.

This results in a degree of uncertainty around the estimates. As such, our estimates have been published with an indication of the extent to which the methodology available to us at the time is considered reliable. We will only seek to publish further estimates once they reach a minimum acceptable level of reliability.

Given this imprecision in measurement, the International Monetary Fund recognises that tax gap estimates generally should not be used mechanically as performance indicators.4 We agree with this assessment.

Tax gap estimates are best viewed as a trend over time, recognising that movements in the trend could still be within the margin of error. The absolute dollar gap should only ever be seen as a guide.

    Last modified: 05 Nov 2015QC 47163