For 2020–21, we estimate the income tax net gap for large super funds to be 1.2% or $339 million. This means we expect to collect over 98% of the income tax relating to 2020–21 financial year.
Large super funds population
For the purposes of our tax gap estimates, the large super population is all super funds, other than the SMSFs and Small APRA funds. Large super funds have thousands or millions of members. Small APRA funds (not included in this analysis) have no more than 6 members and have similar characteristics to self-managed super funds (SMSFs). These funds are covered in our Small super funds income tax gap.
This gap forms a part of our overall tax performance program. Find out more about the concept of tax gaps and the latest gaps available.
Overview of the latest estimate
While there was a peak in the net tax gap in 2015–16, it has remained relatively low over the last 5 years, at below 2%.
Key drivers of tax adjustments relate to:
- structured arrangements providing imputation benefits from Australian shares not held (including enhanced share buy backs participation arrangements)
- foreign income tax offsets and source of hedging gains
- apportionment of non-deductible expenses.
Table 1 shows the tax reported, adjustments, gross and net gaps from 2015–16 to 2020–21.
Element | 2015–16 | 2016–17 | 2017–18 | 2018–19 | 2019–20 | 2020–21 |
|---|---|---|---|---|---|---|
Population | 306 | 290 | 266 | 246 | 227 | 210 |
Gross gap ($m) | 298 | 317 | 211 | 299 | 257 | 339 |
Amendments ($m) | 31 | 124 | 133 | 139 | 94 | 61 |
Net gap ($m) | 267 | 193 | 78 | 160 | 162 | 278 |
Expected collections ($m) | 8,515 | 11,106 | 12,038 | 8,438 | 11,694 | 21,986 |
Theoretical liability ($m) | 8,782 | 11,299 | 12,116 | 8,598 | 11,856 | 22,264 |
Gross gap (%) | 3.4% | 2.8% | 1.7% | 3.5% | 2.2% | 1.5% |
Net gap (%) | 3.0% | 1.7% | 0.6% | 1.9% | 1.4% | 1.2% |
Figure 1: Gross and net income tax gap percentage – large super funds, 2015–16 to 2020–21