Our 2007-2008 Results

Achieving Our Tax Services Strategic Outcome

Taxpayers meet their obligations and Canada’s revenue base is protected

Virtually all public goods and services that enhance the quality of life of Canadians are funded by taxes. As Canada’s principal tax administrator, the CRA plays a pivotal role in ensuring that Canada’s revenue base is protected.

Canada’s tax system is based on voluntary compliance and self-assessment, which, we believe, is the most cost-effective way to administer taxes. Taxpayers are expected to determine their own liability under the law and then pay the correct amount of tax, without our intervention. This means that taxpayers are required to do the following:

• register as required under the law (for example, for the GST);
• file returns on time;
• report complete and accurate information to determine tax liability; and
• pay all amounts when due.

Non-compliance is the failure, for whatever reason, to meet any of these requirements.

Contribution of others

We acknowledge that a number of factors contribute to the strategic outcome that we seek to achieve. These factors include the support of a solid legislative foundation which contains, for example, provisions requiring employers to withhold and remit deductions at source, businesses to collect and remit GST/HST, and sanctions and penalties for non-compliance. Financial institutions assist us by providing convenient, accessible services for individuals and businesses to receive and deposit refunds and remit tax payments on time. The CRA also works closely with the Royal Canadian Mounted Police (RCMP), other law enforcement agencies, and the Financial Transaction and Reports Analysis Centre (FinTRAC) of Canada to combat money laundering, terrorist financing activities, and evasion of taxes or duties. Our efforts to achieve compliance are strengthened through our extensive partnerships with international organizations such as the Organisation for Economic Co-operation and Development (OECD), and the Inter-American Centre for Tax Administrators (Centro Interamericano de Administraciones Tributarias – CIAT).

Our Approach

We strive to minimize the compliance burden for taxpayers by streamlining administrative processes and providing quality service. Where individuals and businesses either unintentionally or intentionally fail to fully comply, we use a wide range of mechanisms to detect, correct, and deter non-compliance and to protect Canada’s revenue base.

Central to how the CRA administers Canada’s tax laws is our understanding of taxpayer attitudes and behaviours. We recognize that taxpayers’ attitudes toward compliance with tax laws are influenced by many factors, including the public’s perception of government, people’s feelings about the fairness of Canada’s tax regime, societal values, the economy, the growing complexity of tax issues, and people’s ability to pay.

The CRA regularly monitors the environment in which it operates. This includes understanding social and technological trends, and shifts in public expectations, attitudes, and behaviours. Our understanding of these attitudes and behaviours helps shape how we administer Canada’s tax laws through our threefold approach of service, enforcement, and redress.

Underpinning our approach is the use of risk management to identify current and emerging compliance threats to Canada’s revenue base and to compliance in general. We seek to mitigate the greatest risks to compliance by using tactics that address specific parts of the tax population or particular areas of non-compliance. The activities we undertake to ensure compliance are guided by research into existing and emerging non-compliance trends and threats to the tax base. This research supports our sophisticated risk assessment systems which examine the characteristics of taxpayers to detect areas of possible non-compliance.

Our approach to the administration of Canada’s tax laws plays a key role in shaping taxpayers’ compliance behaviour. It is our belief that, without the force of applicable legislation, the presence of the CRA, and the way we administer the tax laws, levels of tax compliance in Canada would be lower.

In the following sections, we discuss our key results for 2007-2008 related to priorities identified in our Corporate Business Plan 2007-2008 to 2009-2010.

Our Approach: Service

People find it easier to participate in Canada’s tax regime when the system is accessible, service is timely, and tax information is accurate. In turn, this promotes voluntary compliance and helps prevent compliant taxpayers from slipping into unintentional non-compliance. Our service improvement initiatives are intended to enable Canadians to self-assess and file their tax returns easily.

To enhance service delivery, we built on our electronic (self-serve) offerings to increase accessibility and the dissemination of tax-related information. This past fiscal year, we continued to maximize the use of technology to optimize delivery through channel convergence and to increase accessibility to tax-related information by improving our Web-based products and navigability. This promoted access to the tax-related information that is necessary for taxpayers to meet their obligations. Figure 1 shows the upward trend in visits to our tax-related Web-based products over the past three calendar years. This provides an indication of our success in the electronic dissemination of tax-related information. (Please see PA1 on and PA2 on for details of our activities in this area).

Figure 1 Visits to CRA Web-based Tax Products

As usage of our electronic offerings has increased, our experience shows that some taxpayers continue to prefer agent-assisted service. Indeed, usage of such service has remained fairly constant (see Figure 2).

Figure 2 Agent-assisted Enquiries

In the past year, telephone accessibility issues have resulted in some dissatisfaction expressed by taxpayers. Telephone calls to us are becoming increasingly (now 80%) account-specific. Our confidentiality procedures make account-specific calls longer, leading to a reduction in the number of calls each agent can answer. Internal reallocations during 2007-2008 allowed us to increase agent capacity, thereby enabling us to answer more calls. We have also acknowledged that our current targets of 80% for telephone caller accessibility were not high enough to satisfy taxpayer needs. Consequently, we have increased these targets to 90% for the next fiscal year, and will monitor whether or not taxpayer needs are being met.

Over the past fiscal year, we also continued to encourage the take-up of the electronic filing of tax returns. Electronic filing by individuals has increased to 53.5% of all individual returns filed. Figure 3 shows the uptake trend in electronic filing by the other taxpayer segments, as well as the increase in electronic payments.

Figure 3 Rates of Electronic Filing and Payments

At the end of 2007-2008, 19.9% of all corporation returns filed were filed electronically. Although this is a significant improvement from 2006-2007, it is still a small percentage of the overall population of corporations. Given that the provinces of Ontario, Alberta, and Quebec require the separate filing of federal and provincial returns, the take-up of electronic services for corporations is not expected to significantly increase until 2009-2010, when the Ontario corporation tax return is harmonized with the federal tax return. At that point, Ontario corporations will have the option of filing one electronic return.

Reducing the compliance burden for small businesses

In May 2007, the Action Task Force on Small Business Issues released its final report containing recommendations endorsed by the Minister of National Revenue and our Commissioner. The task force was created to ensure that the administrative policies and practices of the CRA impose the least burden possible on small businesses, while ensuring that legislative and administration requirements are met.

The task force identified three areas of focus:

• to simplify, improve, and, where appropriate, reduce the frequency of small business interactions with the CRA;
• to improve how and when the CRA communicates with small businesses; and
• to make burden reduction systemic within the CRA.

The report identified more than 60 action items, which we agreed to implement across the CRA. We are placing more emphasis on reducing this burden in our strategic planning as well as in our principles of service delivery and business transformation. These steps illustrate how we are working toward achieving a systemic approach to burden reduction for small businesses, while ensuring that small businesses continue to provide us with the information we need to confirm their compliance with tax obligations. During 2007-2008, we developed a measurement framework that will be used to assess our progress in this area.

In our view, the levels of voluntary compliance are significantly influenced by our commitment to quality service and by our commitment to reducing the administrative burden. Our approach to promoting voluntary compliance is consistent with the Government of Canada’s approach to service, and includes our work on citizen-focused service standards (see for a complete discussion and a list of our public service standards results for 2007-2008).

Our Approach: Enforcement

Although quality service helps to promote compliance, there will always be some instances where individuals and businesses either unintentionally or intentionally fail to fully comply. Much of our assurance that we are achieving our strategic outcome is based on our robust system of checks and balances – which includes both prevention and detection. These activities incorporate a mix of compliance tools – such as outreach, audits, enforcement, and legal measures – to protect Canada’s revenue base from non-compliance. We employ these activities to achieve our expected result that reporting non-compliance is detected and addressed.

Over the past fiscal year, the CRA continued its focus on non-compliance that threatens to erode Canada’s revenue base. This included areas in which our 2004 Compliance Review identified as key priority risk areas. As indicated in our Corporate Business Plan 2007-2008 to 2009-2010 , these areas are aggressive tax planning, the underground economy (UE), GST/HST high-risk compliance, non-filers/non-registrants, and remittance non-compliance (collections).

Identifying and addressing reporting non-compliance

Non-compliance with reporting obligations takes many forms: from unintentional errors and omissions to deliberate tax evasion. Identification, correction, and prevention tactics to target non-compliance are implemented throughout the CRA. Although it is hard to quantify the true deterrence value of our enforcement tactics, our strategic indicators of taxpayer behaviour (see ) lead us to believe that our approach to enforcement acts as a deterrent to those contemplating non-compliance.

Our daily work ranges from routine verification procedures (such as matching third-party information while processing returns), to limited examinations, to full audits. In the most serious cases, we carry out tax evasion and fraud investigations, which can lead to fines and imprisonment.

For example, in 2007-2008, we conducted our largest ever search action. This was a result of alleged involvement in fraud related to false Registered Retirement Savings Plans (RRSPs), investment scams, and other tax evasion schemes. Several major cases have been referred for criminal investigation.

More results of these activities are presented in the discussion of program activities 2 through 4 (starting on ).

Aggressive tax planning

We recognize that taxpayers are entitled, as provided by law, to arrange their affairs to reduce tax liability and to receive eligible benefits. Tax arrangements that push the limits of Canada’s tax laws, however, are unacceptable. By proactively addressing aggressive tax planning, we contain these arrangements before they pose a significant threat to Canada’s revenue base.

Our approach to aggressive tax planning is comprehensive. Most importantly, we aim to inform taxpayers by making them aware of unacceptable tax planning practices. In 2007-2008, we implemented an action plan for aggressive tax planning and among other successes, achieved a nearly 30% reduction in participation in gifting tax shelters. Details related to this action plan can be found in PA4 (starting on ).

Underground economy

The underground economy is also a major focus for the CRA. We are committed to combating the underground economy because it erodes the tax base, undermines public perceptions of the fairness and integrity of our administration of Canada’s tax laws, and affects the competitiveness of compliant businesses (see for specific activities undertaken to combat the underground economy during 2007-2008).

There is limited filing or registration data available about individuals and corporations who operate completely in the underground economy. Consequently, this makes effective identification and risk analysis a challenge for us. To begin to address this, we have allocated substantial resources to projects in order to identify and address non-compliance in specific sectors participating in UE activity. Results of these projects will be measured and analyzed to determine whether specific compliance strategies should be implemented to address this non-compliance.

We also work with international partners to share best practices. For example, in 2007, we held bilateral meetings with Her Majesty’s Revenue and Customs of the United Kingdom, the Australian Taxation Office (ATO), and the New Zealand Inland Revenue and participated as an international guest in the Cash Economy Advisory Group with the ATO. These meetings provided an opportunity to enhance our current knowledge and to identify new areas of activity in the underground economy and how to address them.

GST/HST compliance

Our GST/HST compliance strategy focuses on preventing improper refunds and creating a legislative and administrative environment to reduce systemic opportunities for fraud. This specifically includes improving our enforcement activities and ability to identify high-risk registrants and refund claims before credit returns are paid. We also consider any possible implications related to GST/HST refunds when discussing income tax refunds, and vice versa.

Over the past year, we conducted several specific pilot projects aimed at uncovering non-compliance with GST/HST remittance and in claiming overpayments. We found:

• fictitious entities that were registered for the purpose of claiming GST refunds; and
• the risk of GST/HST overpayments was high on some non-resident accounts.

We will use these findings to enhance and refine our risk rating criteria to help us target areas at high risk of GST/HST fraud in future years and, where possible, increase our audit presence.

Non-filers/Non-registrants

The tax return is the basis of establishing a taxpayer’s tax liability. Moreover, registration for GST/HST serves to ensure that the appropriate amount of GST/HST is collected and remitted.

To help us improve how we detect both filing and registration non-compliance, we study the non-filing population with the objectives of identifying non-filing trends; benchmarking our results to more accurately measure the impact on future compliance; and enhancing our systematic risk assessment, thus improving our file selection process.

Addressing remitting non-compliance

Once taxpayer liability is identified, it becomes a debt owed if payment is not made when due. If the assessment (or reassessment) is not disputed by the taxpayer, we move to collect the assessed liability, as well as any accompanying penalties and interest. In certain cases, where legislation allows, portions of disputed assessment must also be collected or secured.

We collect new tax debt after assessing the risk these accounts represent in terms of danger of loss, and identifying appropriate actions to protect the Crown’s interest. Our processes and the resulting activities to collect outstanding taxes payable are described in PA3 (see ).

In recent years, our focus has begun to shift from the management of collection cases to debt or receivables management. This has included the development of enhanced research and analytical ability to help us, for example, improve our understanding of the composition and disposition of individual tax debt. Although the number of non-compliant individuals remained relatively constant, there has been a steady and significant increase in the dollar value of the tax that remained unpaid following the assessment of their returns. This has had a sizable impact on tax receivables.

The factors contributing to our increasing debt inventory are numerous and complex. We believe that the strengthening of our remittance-related research and analytical capabilities, while still in the early stages, will enhance our understanding of factors that affect taxpayer remittance behaviour. In turn, this understanding will inform the future strategies we undertake to manage our tax debt. We expect our Integrated Revenue Collections (IRC) technology platform to play a key role as we implement these strategies.

Our Approach: Redress

The CRA is committed to administering a tax system that is fair and just. Consequently, when taxpayers disagree with us, we provide them with the opportunity for redress. The availability of such a dispute resolution process is central in safeguarding taxpayers’ trust and confidence in the integrity of Canada’s tax regime. We provide taxpayers with avenues for resolution when differences arise regarding tax liability or if there are complaints regarding our services.

In addition, legislated taxpayer relief provisions have permitted the CRA, in certain situations, to be more flexible and responsive to taxpayers’ circumstances when it would be unreasonable or unfair to penalize them. Our aim is to ensure that all taxpayers have access to timely and impartial redress, as discussed in our section on Appeals (see PA5 on ).

On May 28, 2007, the Minister of National Revenue announced two new redress initiatives, a Taxpayer Bill of Rights and a Taxpayers’ Ombudsman. We take every opportunity possible to inform taxpayers of their rights and we are committed to responding promptly to enquiries from the office of the Taxpayers’ Ombudsman.

Our Service Complaints program has begun to help us identify problems and propose solutions, while upholding the eight service rights outlined in the Taxpayer Bill of Rights.

We believe that such improvements to Canada’s tax redress regime increases taxpayers’ confidence in the CRA’s tax administration and enhances our capacity to protect Canada’s revenue base, which is a benefit to all Canadians.

Compliance communications initiative

Using communications as a compliance tool is a central component of the CRA’s overall approach to compliance, which we believe plays a significant role in promoting positive compliance behaviour and deterring non-compliance.

For Canadians who are compliant, communication about what the CRA is doing to combat tax cheating provides them with the reassurance that the CRA is serious about tax cheating. For Canadians who are considering not to comply or who are not compliant, the visibility of our compliance and enforcement activities and results may act as a deterrent and lead them to rethink perceptions of risk associated with cheating. We also need to provide taxpayers with the information they need to understand the risks and consequences of non-compliance.

In 2007-2008, we conducted some qualitative research including some focus group testing of wage earners and small business owners about their attitudes to tax compliance and how their attitudes might be shaped by what we do, or do not do, by compliance communication. The findings indicate that our compliance communications initiative is going in the right direction. Publication of non-compliance results can act as a deterrent to individuals considering non-compliance. Compliance communications, in general, can contribute to perceptions of an open and transparent tax administration, as well as provide evidence of a tax system that is committed and effective in addressing tax cheating.

An increased number of compliance communications activities were undertaken in 2007-2008. For example, for the first time, the CRA participated in the Competition Bureau’s Fraud Awareness Month; a series of compliance “volumetrics” news releases were issued; and several Tax Alerts were released. In particular, in August 2007, a new Tax Alert was issued with regard to donation tax shelters. The Alert was designed to caution donors that the CRA audits all donation tax shelters and that to date, none of the tax shelters audited have been accepted by the CRA. In an attempt to reduce the number of participants in these donor tax shelters, we included a copy of the newly released Tax Alert in a mailing to 65,000 donors whose donations were currently being reviewed by the CRA. As well, two of the CRA’s Tax Alerts were translated into languages other than the two official languages.

We believe that focused, sustained, and timely compliance communications provide Canadians with information about the risks and consequences of non-compliance, help Canadians understand that the CRA takes concrete steps to protect the tax base, and ultimately influence taxpayer perceptions and behaviours about compliance.

Our strategic outcome measures

We use our strategic outcome measures to gauge the compliance behaviour of Canadian taxpayers. Using data from internal and external sources as a baseline of compliance information, we group these indicators into the following four broad categories of taxpayer obligations to help us measure and assess our results against our Tax Services strategic outcome.

• Registration Compliance estimates the proportion of Canadian businesses that have registered as required by law to collect the GST/HST.
• Filing Compliance indicators estimate the proportion of the Canadian population who file their returns on time.
• Reporting Compliance indicators contribute to our assessment of the degree to which taxpayers report complete and accurate information.
• Remittance Compliance indicators estimate the proportion of taxpayers who owed taxes and paid the full amount on time.

To facilitate further analysis of compliance behaviour, we partition the Canadian taxpayer population into the following types: individuals, self-employed individuals, corporations, GST/HST registrants, and employers. Also included are macro-indicators, which we use to evaluate reporting compliance trends.

Our strategic outcome measures are currently undergoing a review in order to enhance our ability to report against our strategic outcome.

Our Tax Services Strategic Outcome Measures

Our Measure: Registration compliance – Rates of registration for the GST/HST

Registration is the first step for Canadian businesses in complying with their tax obligations. We cannot provide registration compliance estimates for businesses that were registered for the GST/HST at this time as comprehensive data from our GST/HST systems is not available. Consequently, we cannot assess our achievement in this area. Trend data over the past number of years, however, provides us with a sufficient level of confidence to conclude that Canada’s revenue base is not being jeopardized by Canadian businesses who are not registered, as required, for the GST/HST. This trend, coupled with the results from our Non-Registrant area ^{[Footnote 1]} (discussed in PA3 on ), provides us with the assurance that there remains a high level of registration compliance by Canadian businesses.

Our Measure: Filing compliance – Rates of filing on time without direct intervention by the CRA

Individual taxpayers include all persons who file or who are required to file a T1 Individual Income Tax and Benefit Return. By comparing our data with census data from Statistics Canada, we estimate that timely filing behaviour of the Canadian population aged 18 and over for 2007-2008 was 92.5%, which exceeds our 90% target.

This data provides us with assurance that there is a high level of voluntary compliance among individuals with respect to filing tax returns.

Our current filing compliance indicator for individuals measures the rate of participation by Canadians aged 18 and over, whether or not they have taxable income.

In the case of corporations, our compliance rate applies only to those that are taxable, which are those corporations that filed a T2 Corporation Income Tax Return showing total tax payable greater than zero. The incidence of timely filing among taxable corporations is 85.8%, which continues, as in previous years, to be below our 90% target. The remainder filed their returns after the due date, either voluntarily or as a result of the work of our Non-Filer area (see PA3 on ).

We cannot provide filing compliance information on GST/HST returns at this time as comprehensive data from our GST/HST systems is not available.

Employers, including individuals, corporations, and charities, are legally responsible for deducting, remitting, and reporting federal and provincial income tax, Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and employer-provided benefits. During 2007-2008, 95.5% of employers that filed their T4 returns, did so on time, as they did in the previous year.

Our review of our strategic outcome measures may result in refinement of our filing compliance indicators.

Our Measure: Reporting compliance

Our macro indicators (see ) show that growth in personal income reported to the CRA tracks favourably relative to that estimated by Statistics Canada. This leads us to believe that Canadians are accurately reporting changes in personal income to the CRA. Also, the net GST/HST revenue tracks favourably with retail sales and personal expenditures on goods and services, which indicates that the majority of Canadian businesses are reporting and remitting the GST/HST they collect to the CRA (see Figure 4 and Figure 5).

Similarly, growth in corporate income taxes assessed by the CRA tracks favourably with growth in corporate profits before tax estimated by Statistics Canada (see Figure 6) and growth in net income of unincorporated businesses reported to the CRA tracks favourably with National Accounts Estimates of the growth in net income of unincorporated businesses (see Figure 7).

While our macro indicators provide us with assurance that taxpayers, in general, are complying with their obligations, we conduct various studies and reviews to detect areas where non-compliance with reporting obligations may be emerging or increasing. For example, we continue to conduct an annual random sample program to estimate the non-compliance rate for individuals with respect to key deductions and credits that are not subject to third-party reporting. Our sample for 2007-2008 estimated this non-compliance rate for individuals as 14.8%, a similar proportion when compared with last year.

Our reporting compliance indicators focus on small businesses because our risk assessment systems indicate that non-compliance is more prevalent among the self-employed and businesses than among individual wage earners. This is because deductions for individual wage earners are usually withheld at source by employers and remitted to us. Also, we review large businesses (those with a gross income of $250 million or more) every two years and, of those selected for audit, we audit the current and prior years. ^{[Footnote 2]}

Most businesses audited under the small and medium-sized enterprise (SME) audit programs are selected on the basis of risk. Our Core Audit Program (CAP), however, selects a random sample of SMEs for audit to estimate a reliable compliance rate. Different segments of the SME population are selected each year. ^{[Footnote 3]} This approach provides us with accurate reporting compliance estimates that allow for monitoring compliance trends over time and for validating and refining the risk criteria used in our risk assessment system (see ).

In the past fiscal year, the CAP program examined the unincorporated business segment of the SME population. This segment’s estimated rate of significant reporting non-compliance (i.e., $5,000 or more in additional federal tax owing) was 14.6% (see ). This is the first year in which this particular segment has been examined since the CAP program was implemented. As such, this estimate of reporting non-compliance will serve as a baseline against which future examinations of this particular segment will be evaluated.

Over the past number of years, CAP has estimated reporting non-compliance in other segments of the SME population with results indicating relatively low levels of non-compliance ^{[Footnote 4]} . We believe that taken together, these results support our assessment that overall, non-compliance with reporting requirements is at relatively low levels.

Dollar value of identified non-compliance

Although results against our strategic outcome measures provide evidence that non-compliance is generally at relatively low levels, the results of our program activities demonstrate that such non-compliance is, in total, financially significant. Please refer to PA2, PA3, and PA4 (starting on ) for additional details on the dollar value of identified non-compliance.

Our Macro Indicators

Our Measure: Remittance compliance – Rate of timely payments without direct intervention by the CRA

Our remittance compliance measures reflect the degree to which various taxpayer segments paid all taxes determined through self-assessment on or prior to the payment deadline. Where amounts owing were not paid on time, we initiated a series of steps to obtain payment (see for more details).

We estimate that 93.2% of individuals with taxes owing paid the entire amount of their taxes on time in 2007-2008. This remittance compliance estimate exceeds our 90% target. This estimate includes those individuals who had taxes deducted at source by their employer.

The estimated percentage of tax remitted on time by taxable corporations during 2007-2008 was 84.9%.

Businesses are also an important contributor to the level of remittance compliance in terms of their collection and remittance of GST/HST. Our ability to assess the level of remittance compliance information continues to be constrained, given limitations with our GST/HST system (see ). As ongoing releases result in increased functionality of the redesigned GST/HST systems, we will have better data and capacity for analysing compliance. The upward trend in numbers of businesses registered, however, combined with our macro indicator showing that net GST/HST revenue tracks favourably with retail sales and personal expenditures on goods and services (see Figure 5 ), provides assurance that the majority of businesses are remitting GST/HST as required by law.

In past fiscal years, the rate of remittance compliance by employers had shown a trend toward less timely payment of source deductions to the CRA. In 2007-2008, 89.2% of employers remitted on time. This is an improvement over the prior three fiscal years’ remittance rate by employers, though still slightly below our 90% target.

Although we do not establish a target for the ratio of tax debt to gross cash receipts, it is a useful trend indicator.

Overall, revenues continued to increase year-over-year (see Financial Statements). Although there are areas for improvement related to voluntary compliance, which have led us to rate this measure as not met, we do not consider there to be an immediate threat to the integrity of Canada’s revenue base, especially in view of our legislated authorities to collect outstanding tax debt.

Conclusion

Our measure of taxpayers’ filing compliance indicates that filing compliance with Canada’s tax laws continued to be high in 2007-2008. While we do not have a registration compliance rate for 2007-2008, trend data for registration compliance over the past number of years, coupled with the results from our Non-Registrant area, provides us with a sufficient level of confidence that there remains a high level of registration compliance by Canadian businesses. Our estimates of non-compliance in reporting for 2007-2008, which provide the foundation for our overall assessment, indicate that, for the majority of Canadians, the incidence and magnitude of this non-compliance is relatively low, though financially significant. Although we recognize that improvements continue to be needed in the area of remittance compliance, we believe that our debt management research will help to inform our future strategies implemented through our IRC project, to manage our tax debt inventory, and to promote remittance compliance.

Given these results, it is our assessment that, overall, taxpayers meet their obligations and Canada’s revenue base is protected.

^{[Footnote 1]} Our Non-Registrant area seeks to ensure that all businesses that are legally required to register for the GST/HST meet their obligations.

^{[Footnote 2]} An internal audit of Large Business in 2006-2007 was conducted to see if the Large Business Audit area was effectively managed and supported. The audit concluded that this area featured a sound approach in that all returns of large corporations were being reviewed and that a complete and clear set of communiqués provided direction for auditors.

^{[Footnote 3]} Non-compliance rate data is available only in multi-year intervals following our CAP research plan.

^{[Footnote 4]} SMEs that collect GST/HST (non-compliance rates estimates are:12.3% (baseline) in 2004-2005, and 9.1% in 2006-2007 for net federal tax greater than $5,000). Self-employed individuals (baseline non-compliance rate estimate is 8.6% in 2001-2002 for net federal tax greater than $5000). SME Corporations (baseline non-compliance rate estimate is 8.5% in 2003-2004 for net federal tax greater than $5,000).

Date modified:

2009-01-29