By KEN WALSH Canadian governments are “shitty” and “unfair” for failing to keep track of how much people are paying in taxes, according to a report by an independent expert.
The study, titled Taxing Canadians: A Case for Reform, also calls for the Canadian government to consider “the impact of a tax regime that does not comply with the rules laid out in Canada’s Constitution” and also for the creation of a new Tax Accountability Council, which would help make sure Canadians understand the full extent of taxes and how they are being paid.
The report, released Wednesday, said governments need to take a closer look at how they spend the money collected through tax laws.
The research group’s president, Robert Boswell, said that the country is “in the midst of an unprecedented wave of taxes” and that it’s important to get a clearer picture of how they’re being spent.
“It is very difficult to estimate exactly how much money is spent on taxes by governments,” said Boswell.
“Taxes are complex and the costs are substantial.
The current tax system is not a good model for the future.”
The Tax Accountability Review Commission’s (TARCC) report recommends that governments “examine the current system for the collection of taxes, its efficiency, and its effectiveness.”
The commission’s report recommends the government “introduce a revenue sharing model” that would involve “giving individuals the option of paying a proportion of their income or not.”
“There is no credible alternative for collecting tax revenues without a tax system that makes clear that it is a share-in-lieu-of-tax system, and that its benefits are shared,” said the report, which was released in conjunction with the International Tax Forum conference.
“The current tax-collection model fails to adequately reflect the value of the tax-collecting activities performed and to ensure that the government is paying the tax that is due it.”
The report says the tax system should be “designed to generate revenues that reflect the current level of taxation and that are proportionate to the benefit that is being achieved by the government.”
It also calls on governments to provide the information that is needed to understand how much is collected, including information on how the government spent the money, how it was distributed, how much of the revenue was collected and who is responsible for the revenue.
“In the absence of an effective system for collecting taxes, there is no justification for the current tax collection system to exist,” said TARCC president Jean-François Caron.
“A new, revenue-neutral system would have to be developed to help collect the tax revenues that are needed to meet the government’s obligations.”
The panel said governments should provide “comprehensive” information to Canadians, including a complete breakdown of how taxes are collected and how much it’s paid to governments, and it’s “essential” to ensure they “are informed about their tax obligations.”
“The most important part of the current collection system is to ensure the collection and administration of taxes,” said Caron, who also chairs the Tax Justice Network.
“We need to have complete information to ensure taxpayers are getting what they pay and are being provided with information on their tax responsibilities.”
In its report, TARcc said the current “distorting” of the taxation system is a result of the “corrupting influence of a handful of special interests, including wealthy individuals, and their business lobbyists.”
The Canadian Taxpayers Federation (CTF) called on the government to “reform” the system.
“If we are to have a fairer tax system, it’s crucial that governments understand what’s really going on and that they’re not being used as a tool by special interests to influence their tax rates,” said Chris Spence, executive director of the CTF.
“That’s why we need to change the system to better reflect how the country collects taxes and provide a level playing field for everyone.”
The TAR Commission also recommends that the federal government “establish a national accountability body to investigate tax collection and the compliance with the tax law.”
“In addition to developing a national revenue sharing system, a national tax accountability body should be established to investigate the accuracy and completeness of tax returns,” said CTF executive director David Wells.
“As a member of this body, the federal Government should establish an audit office that is independent of the executive and legislative branches of government.”
Canada’s Auditor General, however, has called for the federal Liberal government to immediately make a change to the tax collection process, calling for an independent audit.
“To date, the government has not committed to a review of the integrity of the Canada Revenue Agency,” said Peter Matheson in a statement.
“These changes are urgently needed and the Liberal government must take concrete steps now to address the deficiencies identified.”
The Auditor General’s Office said it’s also calling on the federal Conservative government to take action to change “the tax collection rules that allow the federal and provincial governments