Since 2016, the CRA has published reports on various components of the federal tax gap, including estimates and their underlying methodologies:
A conceptual study (June 2016)
Released in June 2016, Tax Gap in Canada: A Conceptual Study was the CRA’s first step towards understanding the concept of tax gap and what it can and cannot tell Canadians and the CRA about compliance with Canada’s tax system. The study provided a definition of the tax gap, discussed the challenges with tax gap estimation, and examined how tax gap estimates can be used in administering taxes. The study also provided an overview of the work done by some of the other countries that use tax gap estimation.
Goods and Services/Harmonized Sales tax gap estimate (June 2016)
Personal income tax compliance in Canada (June 2017)
The CRA released its third report in June 2017, Tax Assured and Tax Gap for the Federal Personal Income Tax System, an estimation of the domestic personal income tax gap and a measure of income tax compliance in Canada using tax-assured indicators. The report found that extensive third-party information reporting, in combination with other features of the tax system, contribute to a tax base that is largely assured or at low risk of non-compliance with minimal direct CRA intervention – 86% of income assessed was considered as assured in 2014.
Tax compliance of individuals in the international context (June 2018)
The CRA’s fourth report, International Tax Gap and Compliance Results for the Personal Income Tax System, examined the international component of the tax gap with a focus on individuals and builds on the study on the domestic personal income tax gap. The report provided an in-depth analysis of foreign reporting obligations, completed international risk-based audits, and an estimate of Canada’s offshore investment income tax gap.
Corporate tax compliance (June 2019)
The CRA released its fifth report in June 2019, Tax Gap and Compliance Results for the Federal Corporate Income Tax System, which examined the federal corporate income tax gap related to reporting non-compliance, where corporations fail to provide complete and/or accurate information on their income, deductions and/or credits. It also highlights the CRA’s key compliance programs and initiatives related to corporate taxpayers.
Excise duties and taxes compliance (December 2020)
Released in December 2020, the Tax Gap for Federal Excise Duty on Cigarettes examined the tax gap related to illegal production/smuggling of cigarettes. It also highlights the CRA’s compliance efforts in the tobacco industry.
Payment tax gap (December 2020)
The CRA’s seventh report, the Payment Tax Gap and Collection Efforts, was also published in December 2020. This report examines the tax gap resulting from payment non-compliance – when assessed taxes are not fully paid by taxpayers for a particular taxation year. The payment gaps for tax years 2008 to 2014 were calculated for four types of taxpayers – individuals, corporations, Goods and Services Tax/Harmonized Sales Tax (GST/HST) registrants, and excise tax and duty licensees/registrants. It also highlights the CRA’s key compliance programs and initiatives related to taxpayers.