CCRA Annual Report to Parliament 2004-2005

Source URL

http://www.cra-arc.gc.ca/gncy/nnnl/2004-2005/prfrmnc-e/bl_tx3-eng.html

Disclaimer

We do not guarantee the accuracy of this copy of the CRA website.

Scraped Page Content

Tax Services

Performance Discussion

The Tax Services business line has two expected outcomes.

Canadians pay their required taxes and the tax base is protected. Canada's tax system is based on voluntary compliance and self-assessment. We believe that most taxpayers, given the proper information, tools and assistance, will voluntarily comply with Canada's tax laws. We assist Canadians in complying with Canada's tax laws by providing timely and accessible services, as well as through education. We also carry out enforcement activities based on risk assessment and risk management.

We have met this expected outcome through the following:

  • continuing our strong performance in service delivery and returns processing. We exceeded our service standard targets for individual and corporate returns, and we have made advances in expanding our range of electronic service offerings;
  • assisting a vast majority of individuals and businesses to file their income tax returns and pay their reported taxes on time. The table entitled Estimated Compliance Rates and Indicators , shows our compliance rates and indicators for filing, registration, remittance and reporting. For the vast majority of Canadians, the incidence and magnitude of non-compliance remain relatively low, although in total it is financially significant. While the CRA has a sustained audit presence across all sectors, CRA enforcement is focused on addressing the small minority of taxpayers who are engaged in more serious acts of non-compliance and who pose the greatest risk to tax revenue;
  • continuing to identify and address non-compliance through the assessment and management of ongoing and emerging risks. We exceeded our fiscal impact commitment to the Government of Canada and met most of our internal audit coverage rate targets. We did not, however, meet most of the audit coverage commitments made to the Government of Canada; and
  • improving our performance in managing tax debt, achieving a rate of production equivalent to the total intake of new debt, meeting our Government of Canada commitment for cash collections, stabilizing the ratio of outstanding tax debt to gross cash receipts and enhancing efforts to reduce older uncollectible accounts, through either collection activities or write-offs.

Provinces, territories and other government departments rely on the CRA as a key service provider. Our legislative flexibilities as an agency, our business expertise and the adaptability of our automated systems enable the CRA to provide Canadians with a wide range of services on behalf of the provinces, territories, and other federal departments and agencies. This helps to eliminate duplication and reduce the overall cost to taxpayers.

We have met this expected outcome by continuing to strengthen our relationships with provincial and territorial clients by administering programs; providing accountable, client-focused services and expanding services for these clients. A new service agreement was signed with Manitoba, and we expect to use this agreement as a model for future negotiations. We also increased the number of arrangements with First Nations. Under these arrangements, we collect income and consumption taxes on their behalf.

By effectively delivering tax services, we believe we have contributed to the achievement of the CRA's strategic outcome.

Estimated Compliance Rates and Indicators

Filing Compliance - Recent analyses show that most Canadian individuals (over 18 years of age) and businesses file their tax returns on time, without any direct intervention by the CRA. Our estimates are outlined below
2001-2002
2002-2003
2003-2004
2004-2005
  • Individuals 1 who filed a timely return 2
93.1%
93.1%
92.6%
92.6%
  • Corporations 3 --taxable incorporated businesses that filed their returns on time
91.9%
87.2%
87.1%
86.0%
  • Businesses 4 that filed their GST/HST returns on time
90.3%
91.6%
91.5%
91.9%
  • Employers who filed their T4 returns
96.4%
96.4%
96.5%
94.5%
GST/HST Registration Compliance 3 - Our estimates indicate a reasonably high degree of registration compliance (many businesses are not required to participate). Our estimates are outlined below
2001-2002
2002-2003
2003-2004
2004-2005
  • Canadian businesses that were registered for the GST/HST
83.2%
84.6%
86.6%
88.8%
Remittance Compliance
2001-2002
2002-2003
2003-2004
2004-2005
  • Individuals who paid their reported taxes on time
90.3%
93.1%
94.3%
93.2%
  • Corporations--taxable incorporated businesses that paid their reported income taxes on time
95.0%
93.1%
91.0%
90.7%
  • Businesses that collected GST/HST 5
2.5 million collected $41 billion
2.5 million collected $44 billion
2.6 million 6 collected $44 billion
2.7 million collected $47 billion
  • Employers who forwarded at-source deductions on behalf of their employees
89.9%
90.1%
90.1%
89.1%
Reporting Compliance - Non-compliance with reporting requirements takes many forms, ranging from errors and unintentional omissions to wilful tax evasion. To make a qualitative assessment of compliance, we rely on macro indicators, such as the tracking of GST revenues to retail sales and personal expenditures on goods and services. We also consider program indicators, compliance rate estimates and public opinion indicators, examples of which are outlined in this report. Our assessment is that, for the vast majority of Canadians, the incidence and magnitude of non-compliance are relatively low, although in total it is financially significant. CRA enforcement is focused on addressing the small minority of taxpayers who are engaged in more serious acts of non-compliance and who pose the greatest risk to tax revenue
Program Year
2000
2001
2002
2003
  • Individuals--Compliance rate for key tax credits and deductions not subject to third-party reporting
92.8%
91.1%
89.9%
88.9%
  • GST/HST--Prepayment compliance rate
N/A
N/A
92.6%
92.7%
1 Statistics Canada estimate, based on census data.
2 These statistics have been restated to exclude late filed returns with balances owing.
3 Source: CRA T2 corporate tax database.
4 Businesses based in Quebec register with the Ministère du Revenu du Québec, which administers GST on behalf of the CRA and remits the net amount due to the Agency.
5 Data is consistent from the prior year cycle to the year in question.
6 Number of businesses updated from last year's number due to rounding.



Date modified:
2005-10-26