The Canada Revenue Agency (CRA) has had more success in recent years in reducing tax evasion among individuals than corporations.
According to the agency’s Tax Gap Analysis report, a copy of which was obtained by our FBI, $6.7 billion in unpaid taxes could have been recovered from individuals in 2018, while the refund was barely $2.2 billion in 2014.
The report notes that about 70% of personal tax evasion stems from “covert economic activity.” […] Hide a form of income,” largely overtime. The rest comes from unauthorized income abroad.
The report said that refunds for unpaid taxes between 2014 and 2018 increased due to increased collection activities by the agency. However, it is not clear where the efforts have been primarily focused: in Canada or abroad.
For companies, the situation has remained relatively similar between these two years. In 2018, the TRA was able to recover $7.9 billion of it, while in 2014 the amount of taxes collected was $6.8 billion.
The report notes that large corporations are the most at fault, as they are the source of 70% of tax evasion, while they represent barely 1% of corporations in Canada.
But, according to the report, it will be difficult to conduct and increase collection activities with very large companies.
“This is especially true for large companies given their global size and operational reach,” the report said.
When he came to power in 2015, Justin Trudeau pledged to reduce tax evasion, especially among large corporations.
Our government is fully committed to combating tax evasion and extreme tax evasion. “We have invested historic sums to fight tax evaders,” the Prime Minister said in the House of Commons.
In general, the Revenue Agency succeeds in countering only a portion of tax evasion in Canada through audit and collection activities.
According to the analysis report, it was calculated that $23.4 billion in unpaid taxes was evaded by the Telecommunications Regulatory Act in 2018, for both individuals and businesses.
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