For 2021–22, we estimate a net gap of 2.9% or $68 million. This means we expect to collect around 97% of the tax we should collect from small super funds.
Small super funds population
For this analysis, we define small super funds as those with no more than 6 members. The small super fund lodged population for 2021–22 consists of approximately:
- 525,087 self-managed super funds (SMSFs)
- 1,368 small Australian Prudential Regulation Authority regulated funds.
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
This tax year's gap estimate uses the data reported to us for the 2021–22 tax year. This includes the registered population, lodged population, amendments, and voluntary expected collections.
For the 2021–22 tax year the gap estimates are based on our random enquiry program conducted in 2023 (on the 2020–21 financial year). This involved stratifying the small super population based on retirement status and asset level, taking representative samples from each stratum, and auditing those super funds selected for any non-compliance with income tax legislation. The results of these random audits were extrapolated to the full small super funds population to estimate the total gross and net tax gaps. We used a similar stratification to update the 2017–21 tax gap estimates.
This updated methodology contributes to improving the reliability rating, bringing it up to a medium score.
The small super funds income tax net gap varies between 2.4% and 2.9% over the 6-year reporting period. The latest tax year has seen a small increase in the gap estimate.
In our random enquiry program, we found the main drivers of adjustments regardless of the super fund's life cycle, were to income, deductions, and offsets, specifically in relation to:
- contributions
- net capital gains
- investment, management, and administration expenses
- franking credits
- trust distributions
- exempt current pension income.
The non-lodging population contributes to the gap with the total funds not lodging an SMSF annual return increasing each tax year.
Table 1 shows the dollar values at the various elements involved in calculating the gap for 2016–17 to 2021–22. The gross and net gaps are also shown as percentages.
Element | 2016–17 | 2017–18 | 2018–19 | 2019–20 | 2020–21 | 2021–22 |
|---|---|---|---|---|---|---|
Population | 549,538 | 554,485 | 552,442 | 547,479 | 542,210 | 526,455 |
Gross gap ($m) | 52 | 59 | 55 | 62 | 77 | 84 |
Amendments ($m) | 16 | 16 | 16 | 16 | 16 | 16 |
Net gap ($m) | 36 | 43 | 39 | 46 | 61 | 68 |
Expected collections ($m) | 1,450 | 1,729 | 1,587 | 1,776 | 2,229 | 2,266 |
Theoretical liability | 1,486 | 1,772 | 1,626 | 1,822 | 2,289 | 2,334 |
Gross gap (%) | 3.5% | 3.3% | 3.4% | 3.4% | 3.3% | 3.6% |
Net gap (%) | 2.4% | 2.4% | 2.4% | 2.5% | 2.7% | 2.9% |
Figure 1: Gross and net tax gap percentage – small super funds, 2016–17 to 2021–22