CRA more efficient when it comes to individuals

The Canada Revenue Agency (CRA) has had more success in reducing tax evasion by individuals than by businesses in recent years.

According to a tax gap analysis report prepared by the agency, a copy of which has been provided to our Bureau of Investigation, it was possible to reclaim $6.7 billion in unpaid taxes from individuals in 2018, while the amount collected in 2014 was barely Reached $2.2 billion.

About 70% of private tax evasion stems from “underground economic activities,” the report says. […] concealing any income”, i.e. largely undeclared work. The rest comes from undeclared income abroad.

Unpaid tax reclaims increased between 2014 and 2018 due to increased collection activities by the agency, the report said. However, it is not clear where the efforts have primarily been concentrated: in Canada or abroad.

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For companies, the situation remained relatively similar between these two years. In 2018, the CRA recovered $7.9 billion from them, while in 2014 the amount of taxes collected reached $6.8 billion.

The report finds that large corporations bear most of the blame as they are the source of 70% of tax evasion, while accounting for barely 1% of businesses in Canada.

But, according to the report, it would be more difficult to conduct and increase collections activities with very large companies.

“This is especially true for large companies given their size and global operational reach,” the report said.

Unfulfilled promises

When he came to power in 2015, Justin Trudeau pledged to reduce tax evasion, particularly at large corporations.

“Our government is fully committed to fighting tax evasion and aggressive tax avoidance. We have invested historic amounts to fight tax evaders,” the Prime Minister said in the House of Commons.

In general, the Revenue Agency succeeds in combating only a portion of tax evasion in Canada through its audit and collection activities.

According to the analysis report, $23.4 billion was lost in unpaid CRA taxes in 2018, for both individuals and corporations.


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