Estimating The Tax Gap

Written by Claude Haiku 4.5 from the extracted text on 28 Feb 2026. It can miss or misread redacted and scanned pages. Check the source before relying on it.

The ATO's October 2024 tobacco tax gap estimates, released by Treasury, show the net tobacco tax gap increased to 14.3 per cent in 2022-23 from 13.1 per cent in 2021-22, representing $2.7 billion in evaded duty. Of this, $2.3 billion was attributed to illicit importation and $0.4 billion to illicit domestic production. Historical data reveals a consistent upward trend since 2016-17, when the gap was 5.4 per cent ($621 million), nearly tripling over six years. The growth trajectory shows accelerating evasion, with the gap expanding from single-digit percentages to double-digit levels, reflecting increasing illicit tobacco market activity despite enforcement efforts.