Fuel tax credits

The fuel tax credit (FTC) gap is the difference between the estimated value of fuel tax credits business are entitled to claim according to the law and the value of fuel tax credits actually claimed by businesses for a financial year.

Our gap relates to overclaiming of fuel tax credits only (that is, where a taxpayer claims more credits then they are entitled to). As an administered expense, the FTC gap arises from:

  • being incorrectly registered to claim fuel tax credits
  • incorrect reporting of fuel tax credits claims
  • non-payment of fuel tax credits liabilities raised from our audit activities. As an expenditure item, debt manifests where a taxpayer has overclaimed fuel tax credits and is required to pay back the overclaimed amount to us.

Our broad approach to estimating the gap

To estimate the FTC gap, we use a combined top-down and bottom-up approach.

We use external data, such as:

  • diesel excise clearance data
  • our benchmarking data?

The FTC gap conceptual framework is represented below. It shows the FTC gap against the revenue base, as well as taxpayer behaviours associated with voluntary compliance, enforced compliance and FTC overclaimed.

Fuel tax credit gap conceptual framework


    Last modified: 05 Nov 2015QC 47278