To develop our tax gap methods, we engage key stakeholders and subject matter experts within the ATO and the community.
These include:
- researchers
- academics
- government agencies
- taxpayer representative groups.
These engagements are important in establishing rigorous and robust methods for estimating tax gaps and it doesn't end once we've developed a method. A feature of this program is the continuous improvement based on feedback received and global developments in the use of tax gap methods and practices.
When models are significantly changed, we engage with relevant stakeholders to review the methods to give us confidence that each method delivers its intended outcome of providing a robust estimate.
Holistic view of the tax gap program
There are 3 main outcome principles to our tax gap program.
Our estimates need to be:
- reliable
- credible
- meaningful.
Each of these principles provides us with a framework (Figure 5) that is reflected through the whole program, including in the reliability assessments for each estimate.
Figure 5: Holistic view of the tax gap program
Reliable
For the 'reliable' principle, we assess ourselves against 2 outcomes – trustworthy and dependable.
For an outcome to be trustworthy, the outcome needs to be transparent, concise and open to evaluation and critique. To achieve a dependable outcome, the estimate needs to use the best practice methods available. The results from those methods need to be repeatable, and the method must be critiqued by experts.
Credible
For the 'credible' principle, we assess ourselves against 2 outcomes – rational and complete.
For the credible principle, an outcome is believable when it explains why the gap is the size it is, and what the wider issues and impacts are. To be complete, the outcome needs to cover all the bases, including where applicable, associated issues and the shadow economy.
Meaningful
For the 'meaningful' principle, we assess ourselves against 2 outcomes – explained and communicated.
This principle ensures that outcomes obtained through our estimates are more than just numbers on a page. It means that business, government and the wider community can understand the analysis. This helps them to engage with us in an informed conversation about the tax and super systems. An outcome is explained if it answers the 'why' questions. It identifies the contributing factors of a gap, the key risks and drivers. It also acknowledges the caveats and limitations of our estimate.
We engage experts to achieve reliable and credible outcome principles of the tax gap program.
The meaningful principle is assessed internally to ensure the reliable and credible outcomes are given appropriate context. This ensures the information is meaningful for the intended audience.