Thursday, October 7, 2010

Downe on Tax Evaders... and for good reason!

Pretty interesting story in the Financial Post today by Diane Francis and it shows just how hard our local Senator Downe is working on behalf of all Canadians... all monies recovered from this process, which will be a substantial sum, comes back into Government's general revenues and reduces our taxes. He makes a very valid point that if we are ever going to track these cheaters down then the Canada Revenue Agency are going to have to step up their efforts in doing so.... great work Senator Downe...

Canada: sucker nation for tax cheats

Diane Francis, Financial Post, October 7, 2010

In 2008, stories broke in the international media that a whistleblower in Liechtenstein had sold information in 2006 to various tax departments in the US, Australia and others about alleged tax evasion. Canadians were cited.

In question and answer period in the House of Commons, Canada’s government said it doesn’t pay for such information. But the US, Australia, Germany and others had already swung into action and have imposed jail sentences and huge fines.

It took a year for Canadian Senator Percy Downe to get answers, under Ottawa’s Access to Information Act, to make sure that even if the Canada Revenue Agency (CRA) didn’t pay, they were pursuing evaders.

The answer in November 2009 was there was about C$100 million in Liechtenstein bank accounts related to 106 Canadian citizens and the “CRA anticipates that it will reassess approximately C$17 million in taxes, interest and penalties.”

Unsatisfied with the delay in action, the Senator sent another request in November 2009 and this week was told that as of June, 26 cases involving 68 individuals had been completed, including 20 residents of Canada who came forward under the Voluntary Disclosure Program; $5.2 million was assessed in back taxes and penalties but an undisclosed amount was unpaid due to appeals and that no one has been charged with tax evasion.

“Unlike the United States, Germany and other countries that moved aggressively and rapidly to recoup any unpaid taxes that were owed, Canada took another tactic: strong words promising action, but little effort to make recovery of unpaid taxes a priority,” wrote the Senator. “Other countries lay tax fraud charges against individuals for having undeclared bank accounts in tax havens, but not Canada.”

Also annoying is the use of the word “assessed”. “It is merely what the government claims it is owed. The account holders are free to appeal, and until their appeals are exhausted, they don’t have to pay a dime,” he said. “Canadians who use domestic banks pay taxes. Why should these people get a tax holiday?”

Most disturbing is the invocation of the Voluntary Disclosure Program (VDP), a partial amnesty for cheaters. The use of the VDP is contrary to what then Revenue minister Jean-Pierre Blackburn pledged in the House in late 2009. He stated uncategorically that no one among the Canadian holders of Liechtenstein accounts had, or was eligible to come forward under the VDP. He also estimated that the CRA would collect $20 million in taxes, penalties and interest.

Senator Downe intends to pursue this scandal to find out exact details, why the CRA relaxed rules on VDPs and why it has taken so long. “Who is being protected?” he asks.

He is to be congratulated for his efforts. Canadians pay high tax rates and provide a high level of services. People who lie and cheat should be hunted down and punished as severely as other developed nations do. This is no way to run a country and smacks of corruption. Or of outright incompetence: “If the 1,785 Canadian-owned Swiss accounts that have recently been disclosed are reviewed as quickly as the 106 from Liechtenstein, it will take just over 274 years to go through them all based on 26 completed cases in four years.”

1 comment:

Anonymous said...

Can he get our taxes back from Brian Mulroney for the money he hid in New York and didn't claim????