Ottawa, 3 April 2012—The Canada Revenue Agency (CRA) is taking adequate steps to encourage individuals and business to file their tax returns and, in the case of businesses, to register for the goods and services tax/harmonized sales tax (GST/HST), says Michael Ferguson, the Auditor General of Canada, in his Report tabled today in the House of Commons.
The Non-Filer/Non-Registrant (NF/NR) program is relatively small (last year’s salary budget was $39 million), but it generated $2.8 billion in additional taxes, interest and penalties assessed in each of the 2009–10 and 2010–11 fiscal years.
“Income tax is the single most important source of government revenue,” said Mr. Ferguson. “It’s important for the Agency to know whether its actions to improve taxpayer compliance are effective.”
The audit found that the Agency’s performance indicators measure the results of routine program activities; they do not provide information about the program’s impact on levels of compliance.
The audit also found that the Agency has not integrated its research and past experience into its planning in order to improve the program. It has validated its process for selecting files to pursue, but not for rejecting files. It needs to determine the effectiveness of both in order to ensure that it is not missing files with significant tax potential.
“The Canada Revenue Agency gets a good return on investment from this program,” said Mr. Ferguson. “We have suggested ways it could improve that return with its current level of investment.”
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The chapter “Non-Filers and Non-Registrants—Canada Revenue Agency” is available on the Office of the Auditor General of Canada Web site.
For more information, please click here.