Canadians for Tax Fairness has continually advocated for the CRA to crack down on large tax avoidance operations, larger corporations and the wealthy and to stop being so heavy handed with less wealthy individuals, charities, and small businesses.
Ottawa (22 Nov 2018) — Canadians for Tax Fairness (CTF) is reporting that the Auditor General’s Report on Compliance Activities by the Canada Revenue Agency (CRA) confirms what they’ve heard from Canadians and from CRA professionals. As the Auditor General reported, the Canada Revenue Agency is more lenient in many ways with international and large businesses and taxpayers with offshore transactions than they are with individual Canadians who are less wealthy.
Relief considered for larger businesses and taxpayers with offshore accounts even when they didn't ask for it
The Auditor General’s report found that “the Agency requested information from these (individual) taxpayers more quickly, and gave less time to respond, than it did with other taxpayers, such as international and large businesses, and taxpayers with offshore transactions.”
The Report also found that, for individual Canadians, “the Agency did not proactively offer relief from interest and penalties—even when the Agency had caused the delays. However, for small and medium-sized enterprises, international and large businesses, and taxpayers with offshore transactions, … the Agency required its auditors to consider offering relief without taxpayer requests.” The CRA has also been inconsistent in waiving penalties and interest, often waiving these when audits (which were generally of businesses) were already underway.
Ability of CRA to go after larger tax avoiders compromised by cuts and misplaced priorities
These findings confirm what the National Union of Public and General Employees (NUPGE) and CTF have heard from many Canadians, including small businesses, who feel that the CRA has been overly heavy handed with them, while not being aggressive enough to recover taxes owed by international and large businesses, and by those with their money in tax havens.
Three years ago CTF published a report entitled What is Wrong at the CRA and How to Fix It that revealed through interviews with CRA staff that their ability to go after larger tax avoiders had been compromised by budget cuts, misplaced priorities, along with allegations of political interference. There’s also been little done to go after the facilitators of aggressive tax avoidance and tax evasion schemes, including large accounting firms.
CRA needs to focus on large corporations and the wealthy
Canadians for Tax Fairness has continually advocated for the CRA to crack down on large tax avoidance operations, larger corporations and the wealthy and to stop being so heavy handed with individuals, charities, and small businesses.
More than a partial reversal of Harper era cuts is needed to get CRA to do its job properly
The Trudeau government has restored some of the funding that the Harper government cut, but CRA hasn’t shifted its focus nearly enough. A recent Environics survey of the entire professional staff at the CRA, sponsored by the Professional Institute of the Public Service of Canada (PIPSC), found that 90 per cent of respondents agreed that “it is easier for corporations and wealthy individuals to evade and/or avoid tax responsibilities than it is for average Canadians.” That percentage is even higher than the 80 per cent of Canadians who agreed with this. Disturbingly, nearly half of CRA professional staff agreed that the "ability of the CRA to carry out its mandate has been compromised by political interference.”
While the CRA is spending money on ads highlighting how it is addressing international tax evasion and aggressive tax avoidance, this report from the Auditor General confirms that, in reality, it continues to be overly lenient with the larger tax cheats and too heavy handed with less wealthy individuals. There urgently needs to be a significant shift of priorities and culture at the CRA.
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 390,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. — NUPGE