Slow progress in improving the collection of tax debts
Chapter 8, May 2006 Report of the Auditor General
Ottawa, 16 May 2006—Despite some significant changes to its collection systems and practices, the Canada Revenue Agency has not made satisfactory progress on recommendations made by her Office in 1994, says Sheila Fraser, the Auditor General of Canada, in her Status Report tabled today in the House of Commons. The Agency's approach to assessing files for risk still has major weaknesses that slow the collection of tax debts.
"The Canada Revenue Agency has known for many years what it needs to do to improve its collection of tax debts, but its efforts have fallen short," said Ms. Fraser. "And it still isn't gathering critical information that it needs to understand and manage the growing tax debt."
The vast majority of taxes and payroll deductions owed are paid to the Agency on time. However, the report notes that at the end of March 2005 the undisputed tax debt totalled over $18 billion, including penalties and interest. Furthermore, since 1994 the tax debt has grown at a faster rate than the total taxes paid. But the Agency is not collecting the data it needs to understand what makes up the tax debt and why it is growing.
The Agency has an ambitious vision for its collection efforts in the future but lacks a detailed plan outlining specifically how it will be achieved.
"Without detailed planning and diligent attention by management, I am concerned that the Agency will have a hard time improving the way it manages collections," said Ms. Fraser.
The Auditor General's Status Report, first released in 2002, is one of the reports from the Office of the Auditor General tabled each year in the House of Commons. It follows up on the government's progress in addressing recommendations from previous reports. The Auditor General concludes that progress is either satisfactory or unsatisfactory, taking into account the complexity of the issue and the amount of time that has passed since the original audit.
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The chapter "Canada Revenue Agency—Collection of Tax Debts" is available on the Office of the Auditor General of Canada Web site.
Information:
Julie Hébert, Communications
Tel.: (613) 952-0213, ext. 6292
E-mail: communications@oag-bvg.gc.ca
