CCRA Annual Report to Parliament 2003-2004

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http://www.cra-arc.gc.ca/gncy/nnnl/2003-2004/prfrmnc-e/bl_tx3-eng.html

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Performance Discussion

The Tax Services business line has two expected outcomes:

Canadians pay their required share of taxes and the tax base is protected – We continued to manage ongoing risks, as well as emerging risks associated with the changing nature of Canada's socio-economic environment, globalization, and the growth of e-commerce. Exhibit 6 shows results for our compliance measures for filing, registration, and remittance. Although we faced challenges in 2003-2004 in bringing tax debt within targeted levels, the majority of individuals and businesses paid their reported income taxes on a timely basis. Building on the CCRA's strong foundation for client-centred service delivery, we also continued to make significant improvements in expanding our range of electronic service offerings in 2003-2004.

Provinces, territories and other government departments rely on the CCRA as a key service provider – As noted under our discussion of the first anticipated result, our ongoing strong service performance has strengthened and enhanced our relationships with our provincial and territorial partners through an accountable, client-focused approach that has been at the forefront of our priorities.

On balance, we believe Tax Services has met both of its expected outcomes through the strong performance demonstrated against each of our anticipated results.

Exhibit 6 Estimated Compliance Rates

Filing Compliance – Recent analyses indicate that most Canadian individuals (18 years and older) and businesses file their tax returns on time without any direct intervention by the CCRA. We estimate:

  • Individuals 1 : 92.1% filed a timely return, down slightly from 94.3% for the prior year
  • Corporations 2 : 87.1% of all taxable incorporated businesses filed their returns on time (87.2% for the prior year)
  • Businesses 3 : 91.5% filed their GST/HST returns on time, similar to 91.6% the previous year
  • Employers: 96.5% filed their T4 returns, essentially the same as the previous year figure of 96.4%

GST/HST Registration Compliance 3 – Our estimates indicate a a reasonably high degree of registration compliance, since many businesses are not required to participate. We estimate:

  • Businesses: 86.6% of all Canadian businesses (including Quebec) were registered for GST/HST, up from 84.6% the previous year

Remittance Compliance

  • Individuals: 94.3% paid their reported taxes on time, an increase from 93.1% in the previous year
  • Corporations: Although a significant number of taxable corporations (40.6%) did not pay their full balance by their due date, 91.0% of total reported income taxes were paid on time, compared to 93.1% for last year
  • Businesses: 2.5 million businesses (including Quebec) collected $44.4 billion in GST/HST, and the Canada Border Services Agency collected $21.1 billion in GST/HST from Customs importations
  • Employers: 90.1% forwarded source deductions on behalf of their employees, the same as in the prior year

Reporting Compliance – Non-compliance with reporting requirements takes many forms, ranging from errors and unintentional omissions to wilful tax evasion. We rely on information from our compliance programs and other indirect measures to make a qualitative assessment of compliance. Our assessment is that, while non-compliance is material, it remains relatively low, in line with prior years and comparable to other OECD countries.
1 Statistics Canada estimate based on Census Data.
2 CCRA T2 corporate tax database.
3 Businesses residing in Quebec register with the ministère du Revenu du Québec which administers GST on behalf of the CCRA and remits the net amount due to the CCRA.



Date modified:
2004-10-28