For 2020–21, we estimate a net wine equalisation tax (WET) gap of 2.8% or $31.4 million. This means we estimate we will collect 97% of the total theoretical WET.
The WET net gap and gross gap estimates have trended downwards over the 6-year period. The latter suggests voluntary compliance has improved over time.
For 2020–21, the gross gap is 3.4% or $38.2 million. From a tax collection perspective, this means that almost 97% of the tax we expect to collect will be collected voluntarily. COVID had a minimal impact on the WET expected to be collected and the overall population subject to WET. The loss of sales in public venues was offset by increased online and retail sales of wine, resulting in no discernible change in overall WET reported.
The legislative changes in 2018–19 have significantly reduced WET refundable and increased net WET reported for the year. At the same time, voluntary payments increased. This has contributed to smaller gross tax gaps for 2018–19 onwards.
Table 1 summarises the results from 2015–16 to 2020–21.
Element | 2015–16 | 2016–17 | 2017–18 | 2018–19 | 2019–20 | 2020–21 |
|---|---|---|---|---|---|---|
Population (count) | 4,001 | 3,992 | 4,009 | 3,809 | 3,777 | 3,785 |
Gross gap ($m) | 39.0 | 39.0 | 39.9 | 37.6 | 37.6 | 38.2 |
Amendments ($m) | 6.2 | 9.3 | 2.9 | 3.9 | 4.4 | 6.7 |
Net gap ($m) | 32.8 | 29.7 | 37.1 | 33.8 | 33.2 | 31.4 |
Expected collections ($m) | 867 | 857 | 911 | 1,013 | 1,021 | 1,086 |
Theoretical liability ($m) | 900 | 887 | 948 | 1,047 | 1,055 | 1,117 |
Gross gap (%) | 4.3% | 4.4% | 4.2% | 3.6% | 3.6% | 3.4% |
Net gap (%) | 3.6% | 3.4% | 3.9% | 3.2% | 3.1% | 2.8% |
Figure 1: Gross and net WET gap percentages from 2015–16 to 2020–21