What’s needed to cut red tape in Canada’s tax system?

Proposals in the Canada Revenue Agency (CRA)’s new Red Tape Reduction Action Plan should improve the tax system. Let’s seize the momentum and build from here. Leave me a comment below.

Delivering tax information in plain language. Giving you access to more of your tax data online. Making tax advice more accessible and reliable. These and other proposals in the CRA’s new Red Tape Reduction Action Plan should go a long way toward improving the tax system. But, as small businesses and practitioners told the CRA during recent cross-country consultations, there’s plenty of room to enhance things further.

In her consultation report, National Revenue Minister Kerry-Lynne Findlay acknowledges that red tape kills jobs, restricts productivity and competitiveness and impedes economic growth. Indeed, the World Economic Forum’s global competitiveness report for 2015 cites inefficient government bureaucracy, tax regulations and tax rates as among the most problematic factors for doing business in Canada.

BUSINESSES CLAMOURING FOR IMPROVEMENTS

The top recommendations arising from the consultations show that Canadians are eager to file their returns and supporting documents electronically — and get more information, services and tools online. The CRA’s plans to make extensive improvements in this area are ambitious, and should make a big difference.

The CRA faces some significant hurdles, however. Internally, setting up complex technological systems that meet the needs of auditors, taxpayers and third parties — including employers and investment dealers — is daunting. And this is especially so when government spending and resources are constrained. Externally, the CRA must accommodate a minority of taxpayers who are reluctant to abandon manual processes and conduct their tax affairs online.

CPAs POSITIONED TO PROMOTE CHANGE

The CRA’s action plan sets out an impressive array of service improvements, but recognizes there is still work to be done. We encourage the CRA to build on its accomplishments and sustain the momentum achieved in helping both individuals and businesses. The revenue minister plans to continue soliciting new ideas that will make a difference. Chartered Professional Accountants (CPAs) will continue to work with the CRA, offering ideas and feedback that promote positive change.

I want to hear from you. What steps do you think the CRA should take to reduce red tape in the tax system and improve services for businesses, individuals and their advisers? Keep the conversation going by posting a comment below.

CPA Canada’s Tax Blog is designed to create an exchange of ideas on tax policy and practice issues, and their impact on those who practice tax. Your comments can provide helpful input into the public interest advocacy positions developed by CPA Canada.

About the Author

Gabe Hayos, FCPA, FCA, ICD.D

Vice-president, Taxation, CPA Canada

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