Limitations of the methodology
Like any statistical estimate, the estimated level of LCT gap is subject to error. The error may arise from independent data sources or assumptions we use in deriving the estimate.
In the Commissioner of Taxation annual report 2010-11, we detailed that LCT revenue had been maintained to within 3% of expectations, based on state and territory registration information over a number of years.
The improved methodology used for the LCT gap in this report is not directly comparable with these previous estimates.
The independent data source does not allow us to identify transactions where vehicles are sold at a discount in exchange for cash, nor where vehicles are 'optioned up' after sale. In these instances, the value of the vehicle registered would be lower than the true final sale price of the vehicle.
There are anomalies within the car sales data, including unrealistic prices. In these cases manual adjustments to the data set were needed.