We seek feedback and advice about how we estimate the gap from our external and internal subject matter experts. Based on the advice, the reliability for this estimate is medium with a score of 18.
Our gap estimate remains highly sensitive to the changes in lodgment trends and the results of our compliance activities. In addition, this year’s gap estimates maintain the current approach to debt. In recent years, there has been a significant increase in debt owed by taxpayers to the ATO. Maintaining the current approach results in the tax gap being underestimated. We have reflected this in the reliability rating. For future publication cycles, we will implement a different approach to estimating debt which will address this issue.
Figure 4: Reliability rating scale from very low to very high – small super funds income tax gap