Last updated: January 10 2017
Canadian taxpayers are a compliant lot: according to CRA, in 2012–13, 92% of Canadians filed their taxes on time and 95% paid their reported taxes in full. This is a remarkable record for a tax system based on self-assessment and voluntary compliance. Yet, there is another side to the story.
In its current corporate business plan, ending in the 2016-17 fiscal year, CRA notes that it is committed to ensuring that it deters tax cheats while maintaining strong internal control to prevent disclosure or access to confidential information.
This is all part of CRA’s challenge to itself to maintain the public’s trust by managing three key risks to its mandate, which is an ongoing and expensive challenge.
When it comes to tax cheats, the top two risks CRA faces are:
A third risk is maintaining the integrity of CRA—the protection of confidential taxpayer information—which it manages through a constant review and upgrade of internal controls.
This all costs a lot of money, as shown in the chart below from the CRA business plan, which also outlines how resources will be deployed in managing non-compliance:
2016-17 planned spending | |
Taxpayer and business assistance | $260,696,720 |
Assessment of returns and payment processing | 613,033,592 |
Collections and returns compliance | 445,886,632 |
Reporting compliance | 1,041,278,958 |
Appeals | 189,591,545 |
Benefit programs | 394,904,973 |
Internal services | 800,490,087 |
Taxpayers' ombudsman | 3,170,366 |
Total planned spending | $3,749,052,873 |
Respendable non-tax revenue pursuant to Canada Revenue Agency Act | (175,962,593) |
Cost of services received without charge | 419,714,150 |
Total CRA spending | $3,992,804,430 |
Over the planning period, the CRA has pledged to manage non-compliance in the small business profile as follows:
These measures, together with the enshrined Taxpayer Rights (see this article), should provide a reasonable approach to managing the other 8% of Canadians who spoil the record of full compliance for CRA.
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