The ATO released an updated Australian Tax Gaps Overview on 28 October 2026, providing a consolidated view of the estimated difference between the tax that would be collected if every taxpayer was fully compliant and the tax actually collected. The overview explains the principles and approaches to measuring gaps, including the top-down and bottom-up methodologies used across different tax types. It presents the latest estimates for the 2023–24 financial year, showing an overall net tax gap of approximately 7.0% of theoretical tax liability, with significant variations across tax types. The report also details the ATO’s compliance strategies to reduce gaps, including data matching, risk profiling, and targeted audits.
Key Takeaways
- Overall Net Tax Gap at 7.0%: The aggregate net gap for 2023–24 remains stable, with the largest absolute gaps in income tax (individuals and corporates) and GST.
- Methodological Transparency: The ATO publishes detailed methodology papers for each tax gap, allowing external scrutiny and continuous improvement of estimates.
- Compliance Investment Impact: The ATO estimates that its compliance activities reduced the net tax gap by approximately AUD 25 billion in 2023–24, highlighting the return on investment in enforcement.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement