TAXPAYERS are gifting the Government billions of dollars a year by failing to claim legitimate deductions - it's enough to make Kerry Packer turn in his grave.
The billionaire once told a parliamentary committee that "if anybody in this country doesn't minimise their tax, they want their heads read, because as a government, I can tell you you're not spending it that well that we should be donating extra".
But donating extra we are.
News Limited analysis reveals workers offset 5.59 per cent of their income in 2005-06 but only 4.76 per cent in 2010-11, the most recent financial year for which ATO data is available.
Had we kept up that 2005-06 level we would have claimed $37 billion of deductions in 2010-11 instead of just $31.5 billion.
On this basis the average taxpayer dudded themselves of $436 in deductions and a potential refund of $131 for those on a 30 per cent marginal tax rate.
Reasons for the decline include the increasing complexity of the system, poorer record keeping by taxpayers - and more DIY returns.
ITP regional director Scott Bailey said people were getting worse at claiming deductions.
"I think they miss out on a lot,'' Mr Bailey said.
H&R Block regional director Frank Brass said: "It comes down to a lack of knowledge. People don't really know what they can claim. But they think they do."
The Federal Government is banking on us doing an even poorer job into the future.
The 2013-14 Budget papers reveal that Treasury expects a $12.9 billion increase in gross income tax this year - a rise of 8.6 per cent. In stark contrast, it estimates refunds will increase by less than 0.2 per cent, or just $50 million.
Yet more people are choosing to their return themselves. ATO data shows the proportion submitted by tax agents fell from 77 per cent in 1999-2000 to 72 per cent in 2010-11.
Ban Tacs consulting accountant Julia Hartman said some new clients get annoyed with all her questions. But they are always pleased when they see the size of their refund.
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