Crackdown on Canada’s tax dodgers should include naming and shaming
TheStar.com – Opinion/Editorials – If Ottawa is serious about clamping down on offshore tax dodgers and on others who flout the rules, it should be prepared to name and shame miscreants with a lot more zeal than it has yet demonstrated.
Apr 11 2016. Editorial
Cheat on your taxes and Canada’s tax agency will find out, will audit and will prosecute. That’s the stern message Prime Minister Justin Trudeau’s government is anxious to put out in the wake of the Panama Papers revelations of widespread offshore tax dodging.
“Wealthy Canadians shouldn’t be able to buy their way out of paying the income tax that they owe,” national revenue minister Diane Lebouthillier told an Ottawa news conference on Monday as she unveiled the details of a $444 million plan first set out in the budget to beef up the Canada Revenue Agency and recoup $2.6 billion or more over the next five years.
The plans include a wholesale CRA crackdown on tax evasion on the Isle of Man, to be followed by more such crackdowns on tax havens. The CRA is also hiring more auditors and lawyers to focus on “high-risk” taxpayers and multinational corporations who use tax havens. The agency expects to recover more than $900 million from these sources alone.
Beyond that, the CRA is setting up a special, independent committee to advise on offshore tax evasion and aggressive tax planning. It is stepping up collaboration with other countries to staunch the losses. And the agency is looking to estimate the “tax gap” so that legislators and the public alike are aware of the size of the problem.
“Those who hide income and assets offshore or try to evade or avoid paying the tax they owe will be identified and face consequences,” Lebouthillier promises.
Canadians who are weary of Panama scofflaws can only hope. A crackdown is long overdue. Affluent Canadians and corporations have some $200 billion in declared assets stashed in tax havens, costing governments upwards of $8 billion a year in lost revenue. No one really knows how much has been tucked away in undeclared assets. Estimating the tax gap may shed some light on that.
Whatever the gap, there’s a lot of foregone revenue that could be spent on Canada’s health system, infrastructure, higher education, and social supports.
But if the Trudeau government is genuinely serious about clamping down, it should be prepared to name and shame miscreants with a lot more zeal than it has yet demonstrated. There’s nothing like shining the antiseptic light of day into murky corners, to discourage banks, law firms, accountancy firms and the like from enabling schemes that play fast and loose with the public treasury.
Yet while agencies such as the CRA and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) are happy to name the small fish they catch breaking the laws and regulations, that hasn’t always been the case with bigger fish.
Just last week FINTRAC, which tracks money laundering and terrorist financing among other things, announced it had levied a stiff $1.1-million penalty on a Canadian bank for failing to report a suspicious transaction and various money transfers. But it declined to name the institution involved. Meanwhile it is busy naming players who have been slapped with fines of $15,000 or less.
And CRA has drawn criticism for quietly offering an amnesty deal to unnamed multi-millionaire clients of the KPMG accounting firm who were allegedly involved in tax avoidance on the Isle of Man. The Canadian Broadcasting Corp. reported that the group was required by CRA only to pay back the taxes they owed, plus interest. Yet the CRA routinely prosecutes and names people who fail to file tax returns or otherwise run afoul of the law.
If the government hopes to “give Canadians greater confidence that the tax system is fair to everyone,” its agencies should be prepared to publicly name offenders. Cutting deals to spare Ottawa the trouble of prosecuting, or to preserve the “good name” of financial institutions and their wealthy clients, isn’t going to reassure anyone other than the scofflaws themselves.
Ottawa shouldn’t be in the business of shielding those who have gone to extraordinary lengths to insulate themselves and their assets from public scrutiny.
< http://www.thestar.com/opinion/editorials/2016/04/11/crackdown-on-canadas-tax-dodgers-should-include-naming-and-shaming-editorial.html >
Tags: economy, featured, globalization, ideology, jurisdiction, rights, standard of living, tax
This entry was posted on Tuesday, April 12th, 2016 at 11:14 am and is filed under Equality Delivery System. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.
Leave a Reply
Recent Comments