TaxRambling.com

I just finished a conversation with another person who believes we can fund a myriad of new programs by “making large companies pay their fair share of tax”.

I responded with the tax gap results, where the Commissioner of Taxation estimates how much unpaid tax exists.

So here it is…

The dodgiest is not a taxpayer but a type of tax… FBT. 20% of FBT is not paid, but it is a very small amount – only $991m a year.

Small businesses are the next dodgiest, with 11.6% unpaid meaning the government is missing out on over $11 billion a year.

Now it gets a little challenging. If you want dodgiest, meaning the percentage not paid, the next three are medium businesses (7%), high wealth individuals (6.7%), and employee individuals (5.6%). But if you want to talk about actual money not paid employees don’t pay over $9 billion in tax they owe each year, while medium businesses and high wealth individuals don’t pay less than $1 billion.

But of course, the best taxpayers (other than super funds) are the large corporate with a tax gap of just 4.2%.

So if you want to collect more tax, employees and small businesses are the place to target as these represent three quarters of all tax avoidance in Australia… but that does not make a good story.

When you look at the table below look at the “net” numbers as the “gross” number includes amount recovered after initial assessments… effectively the gross number includes amount that is actually collected.