"The big dollars are with us claiming work-related expenses," Mr Jordan said. "The biggest gap we've got in the system is us, not them."

The most common claims were for car, home office and travel expenses. Taxpayers in the highest tax bracket claimed 12 per cent of the total value of deductions, and men claimed more than women at all levels of income.

The tax system allows work and investment-related expenses to be deducted against salary income.

Personal income tax deductions totalled $31.4 billion in 2012-13. Of that, $19.7 billion was for work-related deductions and the remainder for investment-related category, mostly for negatively geared rental properties.

The ATO is working on a "tax gap analysis" for large corporates and has hinted the gap could be as low as $2 billion a year. The analysis was due last year but has been delayed.

"Getting every single dollar out of multinationals and large corporates is not going to make a dent," Mr Jordan said.

"The biggest of all is individuals, wage and salary earners, claiming work-related expenses. So that's what we've actually got to focus on to make a real dent across this area."

Mr Jordan was quick to add that the ATO should - and did - go after multinationals, private companies and wealthy individuals. The key to compliance was assuring all parties that everybody else was doing the right thing, he said.

In late 2015, Treasurer Scott Morrison gave the go-ahead for the House Economics Committee, which was then chaired by Liberal MP and successful businessman Craig Laundy, to examine deductions by individuals and companies. No report was produced.

In a submission to the inquiry, the Parliamentary Budget Office said the average work expense claim was $3000, and work-related expenses made up two-thirds of total deductions claimed in 2013, or $19.7 billion.