CRA's new domestic tax-evasion project unnecessary, says P.E.I. Senator Percy Downe
'The effort is pathetic on overseas tax evasion'
The Canada Revenue Agency's new postal code project, which targets the country's richest neighbourhoods, is nothing but a public relations exercise, says P.E.I. Senator Percy Downe.
The CRA should be instead putting its effort into closing the tax gap on what they're collecting from overseas tax havens, said Downe — something he's been pressing for for years.
"There's a host of problems with the Canada Revenue Agency," said Downe.
The agency does an outstanding job on domestic tax evasion, but does an "absolutely terrible job" on overseas tax evasion convictions, he said.
"The reason for that is of course the very rich ... these people have very high-priced lawyers and accountants and Canada Revenue Agency refuses to take them on," Downe asserted.
While it's not illegal to have bank accounts overseas, it is illegal not to declare the proceeds from those accounts, he pointed out.
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Last week in the Senate, Downe tabled a bill that would require the CRA to estimate the tax gap — the difference between what they collect and what they should be collecting — estimated by the Conference Board of Canada to be up to $47 billion. The bill would also require the CRA to publish an annual list of convictions for overseas tax evasion.
Downe asked the parliamentary budget officer five years ago for information on the tax gap and believed last year he was close to getting that — but was told the CRA refused to provide the officer with the data.
In the past, the agency has lacked the resources to pursue overseas tax cheats and even to estimate how much the government is owed. Downe said the government has provided $1 billion over the next five years to address that and spent only $40 million of that in the last fiscal year.
"There's a high level, in my opinion, of incompetence at the senior management of the CRA," Downe said. When comparing CRA's efforts to those in other countries, "the effort is pathetic on overseas tax evasion," Downe said.
In an emailed statement, the CRA said it is currently examining the international tax gap and has committed to publishing a study next year.
The CRA currently has almost 1,000 audits and 42 criminal international investigations underway, with another 123 added since it obtained copies of the Panama Papers, according to the agency.
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With files from Laura Chapin