Our latest estimates show that for 2022–23, the overall net fuel tax credit gap is estimated to be $322.3 million or 4.3%. This means that over 95% of fuel tax credits were claimed correctly reflecting a system that is operating strongly with taxpayers aware of, and claiming, their correct entitlements.
A gap of 4.3% means overclaims have exceeded underclaims. This means some taxpayers who are entitled to receive credits have not claimed all of them, while others have claimed more than they are entitled to.
The increase in the gap estimate for 2021–23 is due to a noticeable increase in overclaims. Overclaiming is largely due to the following:
- Claiming for the incorrect activity.
- This includes incorrect claims driven by an increase in the use of global positioning system (GPS) or telematics technologies to determine boundaries between off-road activities and road transport. The data assumptions made, and the methodologies used are, on occasion, not sufficiently accurate to determine the boundaries accurately, leading to overclaims.
- Being unaware, or ignoring the temporary rate decrease in 2021–22.
- Fraud. We have seen an increase in FTC fraudulent claims consistent with increased fraudulent claims on the business activity statement (BAS) post COVID.
Underclaiming is likely due to:
- conservative estimates
- perceived complexity
- being unaware of rate increases.
Table 1 shows the fuel tax credits claims, compliance, and gross and net fuel tax credits gap estimates for the period 2017–18 to 2022–23.
|
Element |
2017–18 |
2018–19 |
2019–20 |
2020–21 |
2021–22 |
2022–23 |
|---|---|---|---|---|---|---|
|
Credit payments ($m) |
6,846 |
7,185 |
7,412 |
7,548 |
6,904 |
7,753 |
|
Gross gap ($m) |
101.1 |
152.0 |
127.0 |
235.5 |
339.4 |
348.6 |
|
Amendments ($m) |
34.9 |
10.7 |
7.1 |
2.7 |
101.4 |
26.3 |
|
Net gap ($m) |
66.2 |
141.3 |
119.9 |
232.8 |
237.9 |
322.3 |
|
Gross gap (%) |
1.5% |
2.2% |
1.7% |
3.2% |
5.1% |
4.7% |
|
Net gap (%) |
1.0% |
2.0% |
1.6% |
3.2% |
3.6% |
4.3% |
Figure 1 shows the trend as a percentage.
Figure 1: Fuel tax credits gross and net gap percentages, 2017–18 to 2022–23