Using the revised methodology, for 2021–22, we estimate a net gap of 2.6% or $175.3 million.
This gap is a result of estimated fuel tax credit overclaims exceeding underclaims. This means some taxpayers who are entitled to receive credits have not claimed all of them, while others have claimed more than they are entitled to. The estimates using the new methodology are similar to those previously published.
The increase in the gap estimate for 2021–22 is due to a noticeable increase in overclaims. Overclaiming is largely due to:
- claiming for the incorrect activity
- This includes incorrect claims driven by an increase in the use of global positioning system (GPS) or telematics technologies to determine boundaries between off-road activities and road transport. The data assumptions made and the methodologies used are, on occasion, not sufficiently accurate to determine the boundaries accurately, leading to overclaims.
- being unaware, or ignoring the temporary rate decrease in 2021–22
- fraud.
There has been an increase in FTC fraudulent claims consistent with behaviours identified under Operation Protego which related to opportunistic fraudulent claims on the business activity statement (BAS).
Underclaiming is likely due to:
- conservative estimates
- perceived complexity
- being unaware of rate increases.
Table 1 shows the fuel tax credits claims, compliance, and gross and net fuel tax credits gap estimates for the period 2016–17 to 2021–22.
Element | 2016–17 | 2017–18 | 2018–19 | 2019–20 | 2020–21 | 2021–22 |
|---|---|---|---|---|---|---|
Credit payments ($m) | 6,273 | 6,846 | 7,184 | 7,411 | 7,545 | 6,889 |
Gross gap ($m) | 121.5 | 132.2 | 115.0 | 113.7 | 166.2 | 271.1 |
Amendments ($m) | 11.1 | 35.1 | 10.3 | 5.8 | –0.1 | 95.8 |
Net gap ($m) | 110.3 | 97.2 | 104.7 | 107.9 | 166.3 | 175.3 |
Gross gap (%) | 2.0% | 2.0% | 1.6% | 1.6% | 2.3% | 4.0% |
Net gap (%) | 1.8% | 1.4% | 1.5% | 1.5% | 2.3% | 2.6% |
Figure 1 shows the trend as a percentage.
Figure 1: Fuel tax credits gross and net gap percentages, 2016–17 to 2021–22