For 2021–22, we estimate that around 91% or $7.4 billion of the expected alcohol duty will be collected. This leaves a tax gap of 9.1%, or $745 million. Around $660 million or 88.4% of the unreported alcohol duty is because of illicit activity in the shadow economy.
The alcohol tax net gap trend is steady at around 9% for the last five years.
|
Element |
2016–17 |
2017–18 |
2018–19 |
2019–20 |
2020–21 |
2021–22 |
|---|---|---|---|---|---|---|
|
Population |
5,434 |
6,701 |
8,000 |
10,218 |
12,436 |
11,523 |
|
Gross gap ($m) |
555 |
689 |
719 |
660 |
694 |
747 |
|
Amendments ($m) |
48 |
153 |
160 |
64 |
2 |
2 |
|
Net gap ($m) |
506 |
536 |
558 |
596 |
691 |
745 |
|
Expected collections ($m) |
5,322 |
5,534 |
5,798 |
6,008 |
7,004 |
7,435 |
|
Theoretical liability ($m) |
5,828 |
6,070 |
6,356 |
6,604 |
7,695 |
8,180 |
|
Gross gap (%) |
9.5 |
11.3 |
11.3 |
10.0 |
9.0 |
9.1 |
|
Net gap (%) |
8.7 |
8.8 |
8.8 |
9.0 |
9.0 |
9.1 |
Figure 1 displays the same information as a percentage.
Figure 1: Net tax gap (percentage) – alcohol tax gap, 2016–17 to 2021–22
Our analysis finds the key driver of the alcohol tax gap is illicit alcohol activity.
There are a number of known illicit alcohol activities and arrangements that have been identified. These include:
- unauthorised manufacture and unpaid excise duty
- authorised manufacture with underreported or unpaid excise duty
- product diversion
- cross-border transactions (smuggling or export diversion)
- deliberate fraud or evasion.