Ottawa should name and shame offshore tax cheats
TheStar.com – Opinion/Editorials – The Canada Revenue Agency should stop protecting the privacy of offshore tax avoiders, and start protecting the integrity of the tax system.
June 27, 2016.
Oh, to be among the affluent Canadians hiding their fortunes in offshore tax havens. Not only does their money multiply beyond the taxman’s reach, but in the unlikely event they are prosecuted, their crimes against the public probably won’t ever be publicly known.
The Canada Revenue Agency says nine people were convicted of offshore tax evasion over the past two years, receiving $4 million in fines and 84 months of jail time. But it won’t say who these people are.
Strange, given that, as Marco Chown Oved reported in the Star on the weekend, the agency regularly publishes the names of dozens of small-time offenders, including many vulnerable Canadians who have merely fallen behind on their tax payments.
The CRA says this double standard is inevitable. By law, the agency is allowed to publish only information already in the public record. So if a tax cheat strikes a deal with the government, and the nature of the scheme does not appear in court documents, the offender cannot be identified as an offshore tax evader.
Yet other jurisdictions do things differently. In the United States, for instance, if a person or corporation is caught hiding undeclared assets offshore the offender’s name is automatically published on a government website alongside a description of the offence. In Australia and Britain, pressure is mounting to do the same.
The Americans have rightly determined that the public benefit of transparency outweighs the tax-avoider’s right to privacy. Canada should make public exposure a requirement of any deal it strikes with scofflaws.
The benefits would be twofold: the naming and shaming deters other offenders, and the disclosure allows citizens to understand just how thoroughly they are being cheated — and thus how much work the government must do to restore tax fairness. How else, other than through transparency, can citizens be expected to trust their tax system?
And yet, on this, Ottawa has fallen sadly short. Not only are the names of offshore evaders kept secret, but some experts believe the CRA is misleading the public about how frequently Canada prosecutes such cases. Their skepticism was no doubt buttressed by a 2013 CBC News investigation that found the majority of “offshore convictions” reported by the CRA had nothing to do with the sort of abuse of havens that is Canada’s costliest form of tax avoidance.
In the wake of the Panama Papers, the Liberal government pledged $444 million to crack down on tax cheats, particularly those hiding money in offshore havens. In addition to raising needed revenues, the idea was to “give Canadians greater confidence that the tax system is fair to everyone,” according to National Revenue Minister Diane Lebouthillier. At the time, she promised that “those who hide income and assets offshore or try to evade or avoid paying the tax they owe will be identified and face consequences.”
If the minister is truly concerned with the fairness of our tax system, and if she truly wants to restore Canadians’ confidence in it, she should ensure that her ministry acts accordingly.
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Tags: budget, crime prevention, economy, featured, globalization, ideology, jurisdiction, rights, standard of living, tax
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