Although most Canadians pay their tax and expect a responsive and fair tax system, some net high wealth individuals are continuing to find ways to avoid paying the tax they owe, placing an unfair burden on the country.
The Canadian Government and the Canada Revenue Agency (CRA) have taken action by devoting resources to the highest risk areas, both domestically and internationally. The Minister of National Revenue, Diane Lebouthillier, on 9th of June 2017, announced an online consultation to enable Canadians to comment on the CRA’s proposed changes to its Voluntary Disclosures Program (VDP).
The proposed changes to the VDP follow an extensive review of the program in recent months in response to recommendations by the Standing Finance Committee. The proposed changes to the Voluntary Disclosures Program would involve:
- narrowing the criteria of who is eligible;
- confirming that severe cases of non-compliance do not benefit from the same level of penalty and interest relief;
- ensuring that requests that reveal proceeds of crime are excluded from relief; and
- requiring payment of the estimated taxes owed as a condition to qualify for the program.
The VDP applies to disclosures relating to income tax, excise tax, excise duties under the Excise Act, 2001, source deductions, GST/HST and charges under the Air Travelers Security Charge Act and the Softwood Lumber Products Export Charge Act, 2006.
The CRA is inviting public comments on its proposed changes on or before 8th August 2017. The official announcement of the amendments to the voluntary disclosures program would be announced in the fall of 2017 and effective from 2018.