About Tax Services

As the CCRA's largest business line, Tax Services directly affects over 25 million individuals, businesses, trusts, and organizations. The taxes administered, assessed, and collected through this business line, on behalf of the federal, provincial, and territorial governments, fund a wide range of programs and services that ultimately have an impact on the well-being of all Canadians. Day to day, and through our innovation agenda, we work to improve client satisfaction and strengthen public confidence in the integrity of the tax system.

Work in Tax Services involves informing clients of their rights and entitlements; registering new businesses; processing and assessing client returns; maintaining the assessment, application, and compliance of registered charities; maintaining an effective accounts receivable function; performing reviews and audits; monitoring registered plans; and identifying, researching, and prosecuting suspected cases of fraudulent non-compliance. We also issue rulings and interpretations to clarify the application of tax law. Each year, we collect some $300 billion in gross taxes and excise duties, on behalf of the federal, provincial, and territorial governments, which amounts to about $1.2 billion every working day. However, these statistics obscure what is, in reality, a workload that fluctuates dramatically over the year. Gearing up for each “tax season” is a massive undertaking involving an extraordinary amount of complex work behind the scenes.

Exhibit 1: Source of Total Agency-wide Gross Revenues for 2001-2002 ($millions)

As Exhibit 1 illustrates, Tax Services collected about 99% ($297.3 billion) of the total agency-wide gross revenues ($300.8 billion) on behalf of the federal, provincial, and territorial governments. About 75% (or $226.2 billion) of the total gross revenues was from personal and corporate income taxes. Of that amount, 82% (or $186 billion) came from personal income tax. The GST/HST accounts for another 21% ($62.2 billion) of gross revenues; 3% ($8.9 billion) was from excise duties and taxes; and 1% ($3.5 billion) came from customs import duties and other revenues. Offsetting these figures are income tax, GST/HST, excise, and customs refunds that amounted to $60.4 billion in 2001-2002.

When we assess taxes to be paid, we also administer billions of dollars in tax expenditures, such as the Scientific Research and Experimental Development (SR&ED) credits, targeted credits, and deductions that generate refunds or reduce the amount of tax that would otherwise be owed.

Exhibit 2: Key Workload Volumetrics

* Tax Services Business Line only

Spending Profile

In 2001-2002, 53% ($1.92 billion) of the CCRA's overall budget was devoted to the Tax Services business line, against which we spent $1.86 billion ( Exhibit 3 ). While overall funding for Tax Services has increased over the years, it has not kept pace with the increasing complexity and growth of our workloads. Any increased funding had been applied to non-discretionary workloads, such as the implementation of federal budgets and investments in infrastructure. In prior years, many of our activities relating to review, audit, enforcement, and the collection of unpaid taxes suffered from a funding gap. Recent efforts have attempted to address this shortfall. This past year was the first year of multi-year funding that was provided to the CCRA to address these long-term funding gaps in review and enforcement activities and to stabilize the resources in line with rising workloads of increasing complexity.

Exhibit 3: Business Line Spending

Tax Services engages in a range of activities across the compliance continuum (see Schedule A ), from facilitation to enforcement, to ensure that Canadians pay their fair share of taxes and to protect the tax base.

As shown in Exhibit 4 , the largest share of Tax Services resources (48%, a slight decrease from 51% last year) was spent on facilitating voluntary compliance (through various service channels such as telephone assistance, publications, outreach services, and processing returns). The second largest share (27%, compared to 28% last year) was spent on assisted compliance (reviews, examinations, and audits), and the remainder (25%, compared to 21% last year) was devoted to enforcement (e.g. collection actions, investigations, and prosecutions).

Exhibit 4: Total Tax Services Resources Allocated to the Compliance Continuum for 2001-2002 ($millions)

To determine how best to allocate our resources, we use research to understand compliance behaviour and assess risk. We also work with our many partners to promote practices that encourage compliance. We rely on experienced examiners and industry experts within the CCRA and the private sector. Research and expertise help us deploy the CCRA's limited resources to improve the way we manage compliance risks.

Date modified:

2002-11-07