Finder’s Fee on International Tax Cheats a Bad Plan

In a narrow vote, 54% of Knowledge Bureau Report readers do not agree with the new budget proposal that allows CRA to pay a taxable finder’s fee for information on international tax cheats.

Many voting against the finder’s fee proposal were very vocal of their concerns that this incentive could do more harm than good, especially if innocent taxpayers are incorrectly reported of tax fraud.

Sal comments, “I believe that when you reward individuals for reporting on their fellow citizens, it can cause a frenzy of unsubstantiated reports.  What is the consequence if the report is false? I could report on a number of tax payers and hope that one of them has reported incorrectly and I would have won a lottery.”

John adds, “I fear people may think that another party is doing something wrong by mistake without all the details. Once CRA is called in, I fear for the person that has been singled out. The costs can be high even if you have done nothing wrong. …It does not look good in the public eye to raise taxes, so instead money is aggressively collected in the form of interest and penalties and if you do not like it you need to be able to write a big cheque to pay for legal fees. This strong arm tactic will not raise the public’s trust and a law like this will only fan the flames.”

Though not as vocal in their support, 97 of the 212 KBR poll voters agreed with the proposed incentive for information on international tax cheats.

Barb was succinct in her comment: “Absolutely! Tax cheats raise costs for all of us!”

Agree or disagree with the finder’s fee, a mutual concern was that of ethics, professionalism, and confidentiality.

Mike opines “Though their intentions may be noble, government rules making accountants quasi agents of CRA several years ago, FINTRAC making financial advisors de facto agents of itself, and now this proposal show a disturbing evolution towards an “Orwellian” state. The argument that “if you have nothing to hide, then it should not concern you” is fine so long as the state is virtuous. Unfortunately history shows that such is not always the case, and these types of powers are near impossible to unwind.”

Knowledge Bureau thanks the 212 people who participated in April’s poll. This month’s poll question: “In your view, is it better for cash-strapped federal and provincial governments to raise income taxes rather than increase sales taxes? Weigh in here.