After Panama Papers, government reveals $444 million plan targeting high net worth individuals and aggressive tax avoidance schemes
The Government of Canada will not put up with tax avoidance and tax evasion. That was the message from Minister of National Revenue Diane Lebouthillier as she announced plans to crackdown on tax dodgers in light of the Panama Papers controversy.
As part of an announcement on Monday (April 11) at 11am, the Minister highlighted how some wealthy people are hiding money in offshore tax havens and how this needs to change. She revealed that the government will invest $444 million in enhancing the Canada Revenue Agency’s ability to detect, audit and prosecute tax evasion – whether within Canada or beyond these shores.
In her message to reporters, the Minister outlined how the Isle of Man will be the first area targeted. The Canada Revenue Agency will, she stated, monitor all electronic transfers in excess of $10,000 from the Isle of Man, as well as three other offshore tax havens which, currently, remain unidentified. The focus on the Isle of Man comes after the small island off the coast of England was used as part of a tax avoidance scheme – it was revealed by CBC that the Canada Revenue Agency has reached an agreement with clients of KPMG to give them amnesty as long as their taxes were repaid. Electronic fund transfers to the Isle of Man totaled $860 million in a 12 month period and the CRA has assessed the risk for all 3,000 funds transfers involving approximately 800 taxpayers.
In addition, the CRA will form a special program designed to stop organizations that promote tax schemes. The result will be a twelve-fold increase in the number of tax schemes under investigation with penalties and criminal investigations applied where appropriate. More auditors and specialists will be hired as the number of high-risk taxpayers examined will leap from 600 a year to 3,000 a year. It is hoped this strategy will bring in around $432 million in new tax revenue; while the Government will also hire 100 extra auditors to examine high-risk multinational corporations, which, it is hoped, will help bring in an additional $500 million in revenue during the next five years.
Speaking in Ottawa on Monday, Lebouthillier outlined her hopes for the investment.
“Our government has promised Canadians a tax system that is fair and responsive to their needs,” she said. “The unprecedented investment made in the CRA’s activites through Budget 2016 will fundamentally change our ability to identify and pursue both domestic and offshore tax evasion and avoidance. That means a tax system that is applied fairly to all and delivers real results.
“Our government is working hard to give Canadians greater confidence that the tax system is fair to everyone. Those who hide income and assets offshore or try to evade or avoid paying the tax they owe will be identified and will face consequences.”
As part of an announcement on Monday (April 11) at 11am, the Minister highlighted how some wealthy people are hiding money in offshore tax havens and how this needs to change. She revealed that the government will invest $444 million in enhancing the Canada Revenue Agency’s ability to detect, audit and prosecute tax evasion – whether within Canada or beyond these shores.
In her message to reporters, the Minister outlined how the Isle of Man will be the first area targeted. The Canada Revenue Agency will, she stated, monitor all electronic transfers in excess of $10,000 from the Isle of Man, as well as three other offshore tax havens which, currently, remain unidentified. The focus on the Isle of Man comes after the small island off the coast of England was used as part of a tax avoidance scheme – it was revealed by CBC that the Canada Revenue Agency has reached an agreement with clients of KPMG to give them amnesty as long as their taxes were repaid. Electronic fund transfers to the Isle of Man totaled $860 million in a 12 month period and the CRA has assessed the risk for all 3,000 funds transfers involving approximately 800 taxpayers.
In addition, the CRA will form a special program designed to stop organizations that promote tax schemes. The result will be a twelve-fold increase in the number of tax schemes under investigation with penalties and criminal investigations applied where appropriate. More auditors and specialists will be hired as the number of high-risk taxpayers examined will leap from 600 a year to 3,000 a year. It is hoped this strategy will bring in around $432 million in new tax revenue; while the Government will also hire 100 extra auditors to examine high-risk multinational corporations, which, it is hoped, will help bring in an additional $500 million in revenue during the next five years.
Speaking in Ottawa on Monday, Lebouthillier outlined her hopes for the investment.
“Our government has promised Canadians a tax system that is fair and responsive to their needs,” she said. “The unprecedented investment made in the CRA’s activites through Budget 2016 will fundamentally change our ability to identify and pursue both domestic and offshore tax evasion and avoidance. That means a tax system that is applied fairly to all and delivers real results.
“Our government is working hard to give Canadians greater confidence that the tax system is fair to everyone. Those who hide income and assets offshore or try to evade or avoid paying the tax they owe will be identified and will face consequences.”
