We seek feedback and advice about how we estimate the gap from our external and internal subject matter experts. Based on the advice and assessment, the reliability rating for this estimate is medium with a score of 17.
Uncertainty as to the impact of the economic disruption due to the COVID-19 pandemic and its impact on the shadow economy increases the range of uncertainty with respect to our estimates.
The annual measure of the GST liability is influenced by differences in the timing of sales and purchases across the production chain. This is amplified when there is a sharp reduction in demand. The timing mismatch has been heightened across 2019–20 and 2021–22 and so we have smoothed the GST liability to better align with the theoretical GST base.
Tax gap estimates are exposed to all of these influences. For this reason, we have downgraded the reliability of our estimates from 18 last year to 17 this year. The overall reliability remains medium.
Figure 3: Reliability rating scale – GST gap