Tax statistics: Why it’s all in the eye of the beholder

How does the saying go (often attributed to British Prime Minister Benjamin Disraeli): “There are three kinds of lies: lies, damned lies, and statistics!”

Tax is about numbers, big numbers. And those numbers lend themselves to all sorts of statistical analysis.

The ATO’s recently released Taxation Statistics 2012-13 provides a veritable smorgasbord of tax statistics to revel in. Some are interesting; many are not.

And I’m not for a minute suggesting that tax statistics correlates with lies or damned lies!

These stats present an overview of 2013 income tax returns for individuals, companies, super funds, partnerships and trusts. The statistics also cover other aspects of the taxation system such as GST, FBT and excise, along with the superannuation system, in relation to the 2013-14 financial year.

Highlights from the statistics for the 2012-13 year include:

Income tax of individuals was 50% of total tax liabilities.
Company tax comprised 21% of total tax liabilities.
On an industry level, the wholesale trade industry had $30.3 billion in taxation liabilities, while the financial and insurance services industry had $27.5 billion in taxation liabilities. The mining industry had $5.2 billion in liabilities, and the manufacturing industry had $22.3 billion.

Some 12.7 million individuals lodged income tax returns. Tax agents submitted 9.4 million, or almost 75%, of those tax returns, while 2.8 million were submitted using e-tax, and 547,100 returns were lodged by self-preparers (down from 912,205 in 2011-12).

Individuals declared total income of $738.7 billion in 2012-13 (compared with $703.9 billion in 2011-12) and a cumulative net tax payable of $154.9 billion.

For individuals, it seems that negative gearing losses declined. In 2012-13, net rental losses of $5.4 billion were claimed, while in 2011-12, it was $7.8 billion.

Just over 850,000 companies lodged returns (up from 817,885 in 2011-12). Total company expenses claimed were $2,485 billion (up from $2,344 billion in 2011-12). Companies reported total income of $2,714 billion (up from $2,573 billion in 2011-12). Companies were liable for $64.5 billion in net tax (up from $64.2 billion in 2011-12).

In revenue terms, companies declared over $122 billion in revenue from other countries, notably from Singapore, the US, Japan, the UK, Switzerland and New Zealand.

Taxpayers are still selling stuff! Net capital gains were reported by 505,750 individuals (up from 424,320 in 2011-12), 13,950 companies (up from 13,115 in 2011-12) and 56,470 funds (up from 52,130 in 2011-12) totalling $23.9 billion in net capital gains.

GST liabilities and Customs collections totalled $51.7 billion for 2013-14 (up from $48.4 billion in 2012-13).

Just over 450,000 superannuation funds lodged returns (up from 428,055 in 2011-12). Total fund deductions were $22.2 billion (down from $22.7 billion in 2011-12).

The cost of tax compliance went up – just! The average time taken by an individual to complete an income tax return was 4.7 hours (up from 4.6 hours in 2011-12). Companies took on average 7.1 hours to complete an income tax return (down from 8 hours in 2011-12). For individuals, the average cost of managing tax affairs has increased to $379 in 2012-13 (up from $371 in 2011-12).

As you can see, taxation statistics really are in the eye of the beholder. They do provide a valuable source of information for all sorts of purposes, although what one makes of them depends on what one wants to make of them.

Rest assured, there will be more next year.

Terry Hayes is the editor-in-chief of tax news reporting at Thomson Reuters, a leading Australian provider of tax, accounting and legal information solutions.