The Australian Taxation Office (ATO) has called for taxpayers to take extra care when lodging returns after estimating $8.7 billion fell through the cracks.
The ATO said it will be paying close attention to tax returns this year after estimating the tax gap, which is the amount the tax office collects and the amount that would have been collected if taxpayers were fully compliant with the law, climbed to $8.7 billion.
The taxation office released its first tax gap estimate that revealed more than 93 per cent of all income tax is paid voluntary or with little assistance, resulting in a non-compliance rate of 6.4 per cent.
But common mistakes including claiming deductions, incorrectly claiming private expenses or not reporting cash wages have resulted in a net tax gap for individuals not in business to exceed $8.7 billion in 2014-15, according to the ATO.
Deputy Commissioner Alison Lendon called for the 9.6 million individuals who lodge tax returns to pay more attention to the fine details.
“Seven out of 10 returns randomly selected for review had one or more errors," Ms Lendon said.
“What we have seen is that most people make small, but avoidable, errors so we will ramp up our assistance to help these people understand their obligations and get things right. But we are also asking people to take just a little extra care with what they claim, because all of those little amounts add up.
“A smaller number of people are deliberately doing the wrong thing – that has a significant impact on revenue. These people can expect closer attention from us, especially this tax time."
The ATO will be using data and technology to identify mistakes in this year's tax returns, which will also help provide guidance and advice for the future.
The tax gap for corporates was estimated at $2.5 billion in the most recent figures.
Prime Minister Malcolm Turnbull said it was critical individuals and businesses paid their fair share.
"We're in favour of lower taxes but - and this is a big 'but' - paying taxes is compulsory," Mr Turnbull told reporters in Queensland.
"We don't believe in a self-help approach to tax reform."