The ANAO could assess the effectiveness of the Australian Taxation Office’s (ATO) arrangements for reducing and assessing the fringe benefits tax (FBT) gap. The tax gap is a measure used by the ATO to estimate the difference between the tax it expects to collect and the amount that would have been collected if every taxpayer was fully compliant with the relevant taxation law. The ATO estimates the FBT gap in 2022–23 was $1.8 billion or 30.4 per cent. This has consistently been the largest tax gap as a proportion of the potential tax base reported by the ATO since 2019–20.