Summary findings

This year, we have added estimates of wine equalisation tax (WET) payable, excise and duty (for petroleum and diesel, and beer), pay as you go (PAYG) withholding and fuel tax credits (FTC), to our previously published goods and services tax (GST) and luxury car tax (LCT) estimates.

We are working towards developing tax gap estimates for all of the taxes we administer.

In summary:

  • We estimate small, relatively consistent tax gaps for petroleum and diesel, and beer excise and duty. These excise products are concentrated in industries with a small number of large taxpayers who we have generally observed to be highly compliant.
  • Our estimates indicate that the second smallest relative percentage shortfall is in the administration of fuel tax credits. This reflects our findings from benchmarking activities that suggest the gap arises from errors that are generally small by value.
  • The next smallest gap is PAYG withholding, where employers deduct personal tax from wages and salaries and remit that directly to us. This suggests that employers are generally compliant with their withholding obligations.
  • The LCT gap ranks in the middle of the estimates we have made, though there is some evidence compliance has improved in recent years alongside our increased compliance activity.
  • WET payable is also mid-range among the tax gap estimates we have calculated. This is consistent with our observations of compliance within the WET system.
  • The GST gap is the highest among the taxes we have analysed to date and compliance levels are quite stable. Australia ranks relatively well among similar nations that have estimated GST/VAT tax gaps.
    Last modified: 05 Nov 2015QC 47163