I am pleased to note that, today, the Auditor General of Canada confirmed that the Canada Revenue Agency's (CRA) Aggressive Tax Planning program has the tools to detect, correct, and deter non-compliance.
Our Government is committed to ensuring the fairness and integrity of the tax system and that everyone pays the correct amount of taxes they owe. While taxpayers are entitled to manage their tax affairs to reduce or eliminate the amount of tax owing within the objectives, and spirit of the Income Tax Act, the CRA will continue to challenge abusive schemes that are designed to avoid reporting or paying tax on income. Today, the Auditor General confirmed that the Agency has the tools to get the job done and is using them effectively.
I am particularly pleased to note that the aggressive tax plans identified in the report, representing approximately $16 billion in taxable income and credits, have been resolved through legislative amendments and court decisions.
Further, the CRA has accepted and is acting on all of the audit recommendations to improve administrative aspects of the Aggressive Tax Planning program which will further strengthen its capacity.
Since 2006, and including measures proposed in recent Economic Action Plans, our Government has introduced over 85 measures to improve the integrity of the tax system such as:
- announcing the Offshore Tax Informant Program, which was launched on January 15, 2014, through which the CRA may pay rewards to individuals who provide concrete details of major international tax non-compliance to the CRA that lead to the assessment and collection of additional federal taxes owing;
- the mandatory reporting of international electronic funds transfers over $10,000 to CRA;
- revising the Foreign Income Verification Statement (Form T1135) to require more detailed information including the names of specific foreign institutions and countries where offshore assets are located and the quantum of foreign income earned on those assets; and
- ensuring that the offshore regulated bank provisions are not inappropriately used to circumvent the foreign accrual property income rules through foreign affiliates that are not part of a Canadian financial institution group.
These measures will increase our Government's ability to protect the integrity of Canada's tax system and CRA's ability to pursue those who place an unfair burden on law-abiding Canadians.
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