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Some Simple Math on Tax Fairness

Last week a joint exposé by the CBC, Radio Canada, and the Toronto Star revealed more details from the leaked documents known as the Panama Papers. This information shows the inner workings of Mossack Fonseca, a Panamanian law firm that specializes in aggressive international tax evasion.

In this most recent account, some of the weaknesses in Canada’s own tax system were identified. Specifically, secrecy laws that allow people to set up companies without having to register the names of their real owners. Also flagged was the existence of entities referred to as “limited partnerships”, which have the ability to let money pass through them untaxed. Combined with Canada’s glowing international reputation, unregistered ownerships and limited partnerships provide effective tools for wealthy corporations to avoid paying their fair share.

Among the most troubling revelations was the assertion by one of the scheme’s architects that clients should fill out false returns because Canada’s national revenue authority does not have the ability to search enough of them to pose a real threat.

Tax professionals at the Canadian Revenue Agency are disappointed but not surprised by these reports. PIPSC members are in favour of a major overhaul of Canada’s tax and secrecy laws in order to prevent wealthy corporations from using our country to facilitate tax evasion. When looking for solutions, PIPSC members are on the front lines and should be the first group asked for input.

Now is the time for the Government of Canada to continue its reinvestment in the Canada Revenue Agency. Spending that was slashed by the previous government has yet to be restored under the new one. PIPSC members at CRA represent the best defence against unethical behaviour. This is a group of highly skilled accountants and technical experts who are committed to making sure billionaires and corporations abide by the same rules as the rest of us. The math is very simple: the more anti-tax evasion capacity you have, the more bad guys you’re going to catch.

 

Publish Date: 03-FEB-2017 04:39 PM