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  • Tax and small business

    By measuring the income tax performance of small business taxpayers in Australia, we see that this population voluntarily contributes over $85 billion in income tax – this is around 87% of the revenue we expect from them.

    Our research program measures tax performance across all market segments. This research helps us measure the effectiveness of the tax and superannuation systems.

    As part of our research, we also measure the tax gap. The gap is an estimate of the difference between the tax collected and the amount that would have been collected if everyone was fully compliant with tax law.

    The latest estimate of the net small business income tax gap for 2018–19 is $12.5 billion or 12.7%. This estimate is preliminary and will be revised based on updated data and a larger sample size. The revised estimate will be released in 2022.

    We have worked out our estimate using the results of research we performed on a random sample of small business taxpayers – we call this the 'random enquiry program'.

    The random enquiry program helps us to:

    • identify the support businesses need to get their tax right
    • devise strategies to increase willing participation in the tax system
    • target our resources to most effectively combat shadow economy behaviour
    • evaluate how the tax system is performing.

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    Last modified: 20 Oct 2021QC 59955