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Alun Cairns MP from the public administration committee: ''The margin for error is quite significant''
Official UK migration figures are "little better than a best guess", a group of influential MPs has said.
The Public Administration Committee said the statistics were "not fit for purpose" and did not accurately assess how many non-UK residents were entering and leaving the country.
The MPs recommended finding new ways to gather migration information.
The government rejected the committee's conclusions, saying net migration was at its lowest level for decades.
But Labour said the home secretary needed to look at how to measure immigration more accurately "as a matter of urgency".
In the year to June 2012, immigration was estimated at 515,000 while emigration was estimated at 352,000, putting net migration - the difference between the number of people entering and leaving the country - at 163,000.
'Blunt instruments'The Conservatives want to reduce the net migration figure from non-EU countries to under 100,000 a year by 2015.
But the MPs warned that current net migration statistics produced by the Office for National Statistics (ONS) and the Home Office were "blunt instruments" and were "not adequate for understanding the scale and complexity of modern migration flows".
End Quote Vince Cable Business SecretaryWe're not a totalitarian state. We don't count every single person."
In particular, the MPs criticised the main source for producing migration figures - the International Passenger Survey (IPS).
It was designed in the early 1960s to examine tourism trends - something it is still used for today - and is based on "random interviews" with travellers both arriving and departing at ports and airports, they said.
The Office for National Statistics takes the raw IPS data and adds information about asylum seekers and migration statistics from Northern Ireland, as well as figures for people who have entered the country on short-term visas and decided to ask to extend their stay, before arriving at a final immigration figure.
The Public Administration Committee said just 5,000 migrants a year were identified through the survey and it had a "large margin of error".
It said the migration estimates based on the IPS were "too uncertain" to accurately measure progress against the government's net migration target.
And the IPS failed to gather the type of information needed to work out the social and economic consequences of migration, such as demand for the NHS or schools, the MPs said.
Committee chairman Bernard Jenkin said: "Most people would be utterly astonished to learn that there is no attempt to count people as they enter or leave the UK.
"As an island nation, with professional statisticians and effective border controls, we could gain decent estimates of who exactly is coming into this country, where they come from, and why they are coming here.
"As it is, the top line numbers for the government's 100,000 net migration target are little better than a best guess - and could be out by tens of thousands."
'Stupid and offensive'The committee said migration figures could be considerably improved if the Home Office and ONS properly recorded and linked the data they already gathered.
They also called for the e-borders system - which once operational is expected to collect details from passenger lists of all people entering and leaving the UK - to be implemented as quickly as possible.
Alp Mehmet from Migration Watch, which campaigns for tighter controls of immigration, backed the MPs, saying the current way of counting migration was not precise enough.
He told BBC News: "We need to have more interviews overseas. We need to have immigration officers on embarkation controls. We need to bring back common sense into the whole immigration system rather than relying on sample numbers that are no good to man nor beast."
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Business Secretary Vince Cable has described as "stupid and offensive" a van displaying advertising which says illegal immigrants should go home of face arrest.
A Home Office spokesman said: "We disagree with the report's conclusions. Government reforms on immigration are working and the statistics do show that net migration is at its lowest level for a decade.
"The government is determined to build a fairer system and to address the public's concern about immigration."
But Business Secretary Vince Cable said the target to reduce net migration was "misleading" because it included students, who were just visiting and were "good for the country".
He told the BBC's Andrew Marr Show: "We're not a totalitarian state. We don't count every single person.
"The point about those numbers is it only really matters if you're pursuing some target.
"There's this net immigration figure, which the Conservatives are very preoccupied with but its not a government objective."
He also said a government pilot scheme to target illegal immigrants, which involved a van driving around six London boroughs carrying a billboard telling illegal immigrants to "go home or face arrest", was "stupid and offensive".
"It is designed, apparently, to create a sense of fear in the British population that we have a vast problem of illegal immigration," he said.
"We have a problem but it is not a vast one and it's got to be dealt with in a measured way, dealing with the underlying causes."
Mr Cable said he and other Liberal Democrats in government had not been consulted on the scheme and it was "very unlikely" it would continue.
Shadow justice secretary Sadiq Khan said the billboard was "short-sighted and foolish".
"I think this is David Cameron's attempt to try and win over UKIP voters," he said. "I want to see what evidence there is that people have voluntarily left the country as a consequence of these advertising hoards.
"What the government should be doing is have borders that work, so we know who is coming in and who is going out."
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