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Australian Taxation Office Reveals $5.2 Billion In GST Tax Gap

With the ATO releasing its 2020-21 GST administration annual performance report, it believes that around $5.2 billion in goods and services tax continues to be unaccounted for. This is because the ATO previously saw an over 20 per cent increase in GST revenue across the 2020-21 financial year.

The net GST gap calculated for 2019-20 was estimated to be around $5.2 billion or 7.8 per cent. Due to this, ATO received over 92 per cent of the GST revenue that was expected to be collected.

The small business deputy commissioner at the ATO, Deborah Jenkins said, “Overall, the GST system is operating well and compares favourably with similar international tax jurisdictions. With the economy recovering from the COVID-1 after effects, the ATO raised $73.1 billion in GST cash collections for 2020-21. This was $3.3 billion more than the revised budget estimate”.

GST cash collections included:

  • $4.8 billion from the Department of Home Affairs
  • $1.0 billion in GST for digital products, services, and low-value imported goods
  • $2.3 billion in liabilities through client engagement activities
  • $1.1 billion from compliance and lodgement enforcement activities
  • $0.5 billion in compliance liabilities raised from high-risk refund casework

As per the ATO, the expenditure on GST administration for 2020-21 was $538.2 million, which was down to 6.5 per cent from 2019-20. The decrease in costs was a result of ATO’s continued support of the COVID-19 stimulus measures.

Ms Jenkins said, the ATO is now taking a holistic approach to ensure the health of GST and encourage sustained voluntary compliance. Non-compliance will be addressed through the audits and audit amendments will make up a small percentage of total GST collections.

The improvements in the GST system are driven by technology and the latest advancements. Key digital transformation milestones have positively impacted the administration of GST and the establishment of the Australian Business Registry Services (ABRS).

Also, the ATO Business Portal is now replaced with Online Services for Business, thereby making it easier for businesses of all sizes to manage their ATO obligations.

For any assistance regarding personal and corporate taxes in Australia, feel free to contact our registered tax accountants at KPG Taxation.