Ontario Contractor Pleads Guilty to Tax Evasion

The Canada Revenue Agency (CRA) has reported that a Vaughan, Ontario based, general contractor has been fined for evading GST/HST.

The press release by the CRA announces that Gilles Larocque of Nobleton, Ontario pleaded guilty to tax evasion. He was sentenced in the Ontario Court of Justice in Newmarket and fined a total of $301,125.

Larocque pleaded guilty on January 7, 2020, in the Ontario Court of Justice in Newmarket, Ontario to two counts of failing to report income by not filing income tax returns, thereby committing tax evasion under the Income Tax Act.

He also pleaded guilty to two counts of failing to remit Goods and Services Tax / Harmonized Sales Tax (GST/HST) under the Excise Tax Act.

A CRA investigation revealed that Larocque, who owned and operated a construction company in the Vaughan, Ontario area, provided general contracting work to clients that included dry walling, framing and ceiling tile installation for gas stations.

Larocque used several aliases and business names and charged clients for GST/HST, which he used for his personal expenses.

Larocque failed to report income in both 2013 and 2014 tax years and evaded a total of $180,401 in federal taxes.

He also failed to file GST/HST returns in both those years, totalling $120,724 in unremitted GST/HST.

The total amount of federal tax evaded and unremitted GST/HST for the years 2013 and 2014 was $301,125.

Charging GST/HST to clients and then keeping it for your own use is not only against the law, but it’s a pretty sketchy way to get another 13% of income. A common rule to avoid this from happening it to always make sure that you ask for a receive a receipt. The receipt pretty-much (but not always) ensures that the seller is reporting the GST/HST that they collect from you, and the income earned from your purchase.

 

 

CRA: Cannabis Taxation at a Glance

Beginning likely in 2020, the Government of Canada will begin to legalize, regulate, restrict and tax cannabis to keep it out of the hands of kids, and profits out of the hands of criminals.

The Government of Canada believes that the total of federal and provincial-territorial taxes on cannabis products should not exceed $1.00 per gram, or 10% of the producer’s sale price of a product, and that this tax room should be shared equally between the Federal government and the Provincial government.

The proposed federal excise duty rate would be 50 cents per gram of cannabis, or 5% of the producer’s sale price of that product.

An additional rate would apply for an agreeing province or territory.

The proposed duty would apply to all cannabis products available for legal sale, including fresh and dried cannabis, cannabis oils, as well as seeds and seedlings for home cultivation.

The rate will also apply to the sale of medical cannabis.

It is important to note that excise duties are not paid directly by consumers. Rather, they are paid by manufacturers.

Cannabis product sales will be taxable under the Goods and Services Tax/Harmonized Sales Tax (GST/HST), as is currently the case for medical cannabis, for example.

The following example, provided by the government of Canada, illustrates the final price paid by consumers at a combined rate of $1.00 per gram, or 10% of the sale price:

One gram of dried cannabis

Pre-duty price: $8.00

Excise duty (per gram): $1.00

Subtotal: $9.00

GST/HST: $1.17

Total: $10.17

60 ml bottle of cannabis oil

Pre-duty price: $130.00

Excise duty (%): $13.00

Subtotal: $143.00

GST/HST: $18.59

Total: $161.59