## The Revenue Administration Gap Analysis Program: An Analytical Framework for Personal Income Tax Gap Estimation

_Technical Notes and Manuals, August 27, 2021_

## Source details

**Canonical URL:** [The Revenue Administration Gap Analysis Program: An Analytical Framework for Personal Income Tax Gap Estimation](https://www.imf.org/en/publications/tnm/issues/2021/08/27/the-revenue-administration-gap-analysis-program-460749)

## Other formats

- [Markdown version](/en/publications/tnm/issues/2021/08/27/the-revenue-administration-gap-analysis-program-460749/index.md)
- [Structured JSON version](/en/publications/tnm/issues/2021/08/27/the-revenue-administration-gap-analysis-program-460749/index.json)
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## Bibliographic details
- Published: August 27, 2021
- Series: Technical Notes and Manuals
- DOI: https://doi.org/10.5089/9781513577173.005

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### Summary and purpose
- It is generally difficult to measure revenue not collected due to noncompliance, but a growing number of countries now regularly produce and publish estimated revenue losses.
- Good tax gap analysis enables the detection of changes in taxpayer behavior by consistent estimates over time.
- This Technical Note sets out the theoretical concepts for personal income tax (PIT) gap estimation, the different measurement approaches available, and their implications for the scope and presentation of statistics.
- The note focuses on practical steps for measuring the PIT gap by establishing a random audit program to collect data, and how to scale findings from the sample to the population.

### Theoretical concepts for PIT gap estimation
- Defines the conceptual basis for estimating the personal income tax (PIT) gap.
- Discusses implications of different conceptual choices for the scope and presentation of PIT gap statistics.
- Emphasizes consistency of methodology over time to detect changes in taxpayer behavior.

### Measurement approaches and implications
- Presents different measurement approaches available for PIT gap estimation.
- Explains implications of each approach for the scope of the estimate and how statistics should be presented.
- Highlights the role of taxpayer registry data and considerations related to the Non-Observed Economy and the Shadow Economy.

### Practical steps: Random Audit Program and scaling
- Recommends establishing a Random Audit Program to collect representative data for PIT gap estimation.
- Describes how to scale findings from the random-audit sample to the population to produce aggregate PIT gap estimates.
- Notes relevance for auditing, tax compliance measurement, and revenue performance assessment.

### Key subjects and keywords (as listed)
- Subjects: Auditing, Expenditure, Personal income tax, Public financial management (PFM), Revenue administration, Revenue Administration Gap Analysis Program (RA-GAP), Revenue performance assessment, Tax gap, Taxes
- Keywords: Auditing, gap estimate, Non-Observed Economy, Personal Income Tax, Personal Income Tax gap estimation, PIT gap, publication order, Random Audit Program, Revenue Administration Gap Analysis Program (RA-GAP), Shadow Economy, Tax Administration, Tax Avoidance, Tax Compliance, Tax Evasion, Tax Gap, taxpayer registry data

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## Content in this bundle

- **Appendix 1  Random Sample Designs**
  - [Appendix 1  Random Sample Designs (Markdown version)](/-/media/files/publications/tnm/2021/english/tnmea2021009.pdf.md){rel="alternate" type="text/markdown"}
  - [Appendix 1  Random Sample Designs (PDF)](/-/media/files/publications/tnm/2021/english/tnmea2021009.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/tnm/issues/2021/08/27/the-revenue-administration-gap-analysis-program-460749_