Proposed Changes to CRA VDP Should Go Further – Union.

The changes proposed by the Canada Revenue Agency (CRA) to the Voluntary Disclosures Program (VDP) have been described as an improvement, but no where close to what is needed to reduce tax evasion, according to The National Union of Public and General Employees (NUPGE) – one of Canada’s largest labour organizations.

VDP, as we all know, gives Canadian taxpayers who made mistakes or hid income on their taxes the opportunity to voluntarily come forward to the CRA and declare or correct the mistakes without fear of prosecution, and gross negligence penalties.

Some, however, feel the VDP has been overly generous in cases such as the deal offered to clients of the KPMG Isle of Man tax scheme.  The same people also believe that the CRA’s VDP has failed to differentiate between those who simply made errors in their tax return and “wealthy individuals” who wilfully evaded taxes using offshore tax havens.

While it can be very difficult to distinguish between someone who willfully evades taxes from someone who tried to but got caught, it is quite clear regarding the use of tax havens because either you report your offshore income (legal) or you don’t (illegal).

The union strongly believes that those caught “using a tax haven should be treated more severely than innocent mistakes.”

The Minister suggested that releasing the names of the participants and their advisors should be required although the CRA has always kept track of both scenarios once the disclosure has been approved.  Where a taxpayer received assistance from an advisor in respect of a VDP application, the name of that advisor should generally be included in the application.

The union expressed concern that the proposed changes fail to restrict access to voluntary disclosure in cases where leaks about tax havens are likely to provide the government with lists of Canadian account holders.  They feel that at that point, “it should be too late for wealthy individuals to take advantage of the VDP if they are already likely to be exposed.”

While I do agree the government should look at how they treat those who have not filed differently than those who store money offshore in hopes of evading the paying of taxes, I do not agree that in each and every case it is the “rich” or “wealthy” who are doing it.

In fact, I have encountered many Canadians of all races, religions and levels of income who have stuffed away money overseas and they range from being super-wealthy, to single parents on OAS or pension income who can barely make their rent.  It’s not just a “wealthy” issue.

Sure, it doesn’t read as well if its not an attack on the “rich” and yes, there are some who have complained that nowadays it is the unionized worker who is the “rich” in Canada, which is why I prefer to not paint everyone with the same brush, and group by filers and non-filers.

Under the program, any use of a tax haven scheme should mean less relief than for other forms of non-compliance, which makes a lot of sense.

For the union, they believe that; “the majority of Canadians feel that there are two tax systems, one for the rich and one for the rest of us.  It is very important for the government to get this right.”

NUPGE: 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.

Link to original article:

https://www.nupge.ca/content/proposed-changes-canada-revenue-agency%E2%80%99s-voluntary-disclosures-program-should-go-further

 

 

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CRA Helping Small and Medium Sized Canadian Businesses

On June 27th, 2017 The Government of Canada announced that they are committed to ensuring tax fairness for all Canadians, as they recognize the importance of small and medium businesses in creating jobs and growing the economy.

As a result, they made a commitment to overhaul its service model so that people who interact with the Canada Revenue Agency (CRA) feel like valued clients, not just taxpayers.

Today, the Honourable Diane Lebouthillier, Minister of National Revenue, unveiled the CRA’s actions for the next two years to make its services for small and medium businesses more helpful and easier to use.

The Report on the Canada Revenue Agency’s 2016 Serving You Better consultations with small and medium businesses contained concrete commitments based on feedback shared by small and medium businesses and chartered professional accountants in the fall of 2016.

The CRA’s 2017-2019 Serving You Better action plan contains over 50 action items that will improve services for small and medium businesses.

Top 10

Here are the top ten service improvements for businesses, which will allow them to:

  1. Receive a CRA security code by email rather than mail
  2. Call a new dedicated telephone service for tax preparers that helps with more complex technical issues
  3. Request a Liaison Officer visit
  4. Provide T4 information slips to their employees in electronic format
  5. Use T2 Auto-fill through commercial software
  6. Create their own filing and balance confirmation letters online
  7. Create short “how-to” videos that explain the services on My Business Account
  8. Experience telephone service improvements
  9. Share feedback about their audit experience in a new post-audit survey
  10. Help Canadians have their objections resolved faster

To find out more about the CRA’s action plans to serve small and medium businesses, go to canada.ca/cra-serving-you-better.

Quick Facts

During the 2016 Serving You Better Consultations, the CRA and their senior officials met with over 300 participants face-to-face to discuss what the CRA could do better.  Approximately 135 of these participants sent their views online or in writing.   All in all, the CRA received over 1,500 comments and suggestions for improvements to their services.

Who was consulted?

The CRA partnered with the Canadian Chamber of Commerce and the Chartered Professional Accountants of Canada to host a total of 21 sessions with small and medium business and accountants in cities across Canada.