Study highlights problems with the current tax system and how to fix them
The Canadian tax system is not working for Canadian businesses or individuals and needs an overhaul, a new report says.
Chartered Professional Accountants of Canada (CPA Canada) says that the current system’s failings have social and economic impacts and must be changed to help Canada grow and prosper.
The last extensive review of the Canadian tax system was in the 1960s and the CPA Canada Business Monitor for Q4 2018 showed that 79% of senior business professionals support a comprehensive review.
“With the growing chorus for change, if the government does not announce this much-needed initiative in the next federal budget, we hope it and other parties will show their commitment by making a tax system review a key pledge in their campaign platforms for the upcoming federal election," says Joy Thomas, president and CEO, CPA Canada.
CPA Canada is among a growing group of advocates for a tax review which includes other national business organizations, leading think-tanks, parliamentary committees, the Advisory Council on Economic Growth and international bodies such as the Organisation for Economic Co-operation and Development and the International Monetary Fund.
While there are concerns about its fairness, one positive for the tax system is that it’s the best in the G7 for preparing, filing, and paying taxes.
What needs to happen?
CPA Canada says there are several key factors required for a review of the Canadian tax system:
- Comprehensive in scope, putting all aspects of tax policy and administration and how they interact on the table in order to identify broad, systemic improvements
- Conducted by an independent expert panel, appointed by the Minister of Finance
- Governed by clear terms of reference setting out a broad mandate with respect to transparency, timelines, public consultation and review, as well as access to research and analysis resources
- Followed by a published response and key actions on the part of the government
