Tax professionals’ survey
A survey of Canadian CRA tax professionals has found that most believe the rich are better able to avoid taxes.
Nine out of 10 of the 2,170 members of the Audit, Financial and Scientific Group (AFS) who responded to a survey by the Professional Institute of Public Service of Canada (PIPSC) agreed with the statement: It is easier for corporations and wealthy individuals to evade and/or avoid tax responsibilities than it is for average Canadians.”
The professionals polled believe that tax audit coverage is inadequate (just 16% thought it adequate) with 79% saying that training and technology advancements within the CRA have not kept pace with the complexity of tax avoidance schemes.
“These findings highlight the difficulties our members face to ensure Canada’s tax system remains fair in the face of off-shore tax havens and other tax avoidance schemes,” says PIPSC President Debi Daviau.
Are new tax laws needed?
Despite their concerns, 84% of respondents felt that they have the legislative tools to tackle the issue of tax avoidance.
They said that the CRA can do more to increase revenues without raising taxes, simply by better enforcing existing tax laws…if they had the funding to do so.
“While the current government has reinvested significant amounts in the CRA since 2016, there remains a $500-million annual gap in CRA funding compared to 2012, when the former Harper government announced massive cuts to the agency’s budget,” added Daviau. “That’s money that should be reinvested in next year’s federal budget to bolster employee training and technology and to strengthen additional efforts to ensure tax fairness.”
The survey found that 81% of CRA tax professionals say tax credits, tax exemptions and tax loopholes disproportionately benefit corporations and wealthy Canadians compared to average Canadians.
Three-quarters agree multinational corporations shift profits to low-tax regions even when there is little to no corresponding economic activity taking place in that jurisdiction.
Over one-third agree that internal restructuring at the CRA following the 2012 budget cuts resulted in average Canadians, charities and small businesses being targeted more relative to wealthy Canadians and corporations.
And nearly half agree that the ability of the CRA to carry out its mandate has been compromised by political interference.