Annual Report 2007: Part two - Key business results
Revenue identified through audits
Our investigations of taxpayers often determine a difference between the tax assessed by the taxpayer and the liability established by the audit, plus any penalties and interest. These discrepancies are an important measure of the effectiveness of our audit work in addressing areas that present a risk to revenue.
In 2006-07 we identified $996 million in audit discrepancies, slightly more than in the previous year. A significant portion of discrepancies reflect our major area of focus in audit - tax avoidance and evasion - where discrepancies were $375 million, up from $326 million last year.
| Actual 2005-06 $ million |
Budget 2006-07 $ million |
Actual 2006-07 $ million |
|
|---|---|---|---|
| Non-business and business audit | 297 | 316 | 262 |
| Aggressive tax issues | 254 | 122 | 247 |
| Tax evasion and fraud | 72 | 63 | 128 |
| Large Enterprises | 357 | 327 | 359 |
| Total | 980 | 828 | 996 |
Notes
- Net discrepancies = gross discrepancies less timing adjustments (these adjustments are for errors found in a filed return for one period, but claimable in another)
- Not all net discrepancies result in immediate tax liability or payment of additional tax. Adjustments to losses have an impact on current or future tax, and imputation credit adjustments similarly affect future tax liabilities.
For 2006-07:
| Net total discrepancies | $996 million |
| Less loss reduction adjustments | $206 million |
| Less imputation credit adjustments | $188 million |
| Additional tax assessed | $602 million |
The value of discrepancies differs from year-to-year due to the effect of large cases which may be finalised in a particular year.
The discrepancy figures above include cases where taxpayers have made a voluntary disclosure about under-reported tax. The disclosures can be made before or during an audit and result in lesser penalties. In 2006-07 there were 1,362 voluntary disclosure cases with a total value of $293 million.
An audit may also find that a taxpayer should actually receive a credit or refund. In 2006-07 $54.2 million was credited or refunded.
Date published: 23 Oct 2007
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