Business Lines

Tax Services

This business line touches the lives of over 29 million individuals, businesses, trusts, and organizations. Taxes collected on behalf of the federal, provincial, and territorial governments and First Nations pay for programs that contribute to the social and economic well-being of Canadians. Each year, Tax Services collects over $310 billion in revenue on behalf of the federal and provincial governments. In 2002-2003, we processed 22.9 million individual, 1.4 million corporate, 6.8 million GST/HST, 164,300 trust, and 123,547 charity returns, and we completed 301,714 audits and 3,990 enforcement activities.

Strategies and Key Initiatives

We will implement the following initiatives and strategies over the planning period:

Enhance our risk assessment practices and adjust our compliance strategies to address an increasingly complex environment

Our risk assessment systems are updated as new risks are identified. Work will continue on the Compliance Measurement Framework (CMF) by adding indicators in 2004-2005. This will allow us to better understand compliance behaviour. We will also deliver the fifth and sixth versions of the Compliance Measurement, Profiling, and Assessment System (COMPASS), a decision support tool designed to ensure compliance risks are managed through effective targeting.

Over the planning period, we will pursue a number of compliance and enforcement activities, focused on the areas of greatest risk:

• aggressive tax planning
• GST/HST program
• underground economy
• collections and non-filers

Limiting the growth in accounts receivable and collecting revenues is essential to meeting our commitment to collect taxes on behalf of the federal, provincial, and territorial governments. In 2002-2003 we came close to matching our intake in new debt. This year, we will ensure that the dollar value of the accounts resolved meets or exceeds the intake of new debt by:

• establishing national pools of accounts for new intake;
• enhancing the systems we use to manage our workloads; and
• directing more work to our Collections Call Centre.

Finally, we will fully implement Part 6 of C-36 [Charities Registration (Security Information) Act] in co-operation with Public Safety and Emergency Preparedness Canada (which includes the core activities of the Solicitor General of Canada). This statute enforces Canada’s commitment to international co-operation to deny support to those who engage in terrorist activities. It also protects the integrity of the registration system for charities under the Income Tax Act.

Continue to improve the quality of tax services through Future Directions

Future Directions for the Canada Customs and Revenue Agency was released by the Minister of National Revenue on September 26, 2002. This initiative focuses on service to Canadians and facilitates voluntary compliance by tailoring information and services to the needs and requirements of clients or groups of clients. The continued growth in electronic filing is particularly encouraging. We will continue to improve our traditional service channels and expand electronic interaction through effective market targeting in the following areas:

• target 50% for electronic filing of T1 returns for 2004-2005;
• build the capacity to process additional returns electronically in the next few years; and
• explore opportunities to implement a joint T2 filing process with Alberta and Ontario.

Work will continue on the “My Account” Web pages to allow individuals and businesses to make their own adjustments on-line and apply for benefits over the Internet. We will improve our Web site to help clients get answers to their questions. We will also implement Collections Call Centre enhancements to allow clients to pay debts by telephone or make payment arrangements on the Internet. As well, linking our electronic services to those of other federal departments and levels of government continues to be a priority. By contributing to a more integrated service delivery, we can reduce duplication and overlap.

We will expand the use of the Business Number (BN) across the country. The BN facilitates processing, assessing, and validating information filed on T2, T4, T5, and GST/HST returns. We will continue to implement Standardized Accounting, which provides business clients with more flexibility in dealing with the CCRA. Standardized Accounting will align payment due dates and reporting periods, standardizes penalty and interest calculations, and provides the options to combine payments, net refunds owing with payments due, and receive consolidated statements, thus creating internal efficiencies and simplifying procedures for Canadian business.

The GST/HST programs, operations and services will be modernized by standardizing systems and business platforms across the Agency, correcting deficiencies, and working with the Department of Finance to draft harmonized legislation.

Continuing work on the Remittance Image Archiving initiative will make our processes more effective. We will replace the aging microfilm equipment and bring our equipment and processes up to payment industry standards. We plan to have this technology in place by March 2006.

We will also continue to improve programs such as the Scientific Research and Experimental Development (SR&ED) Program, which encourages Canadian businesses to conduct research and development in Canada. We have increased program awareness and established a Partnership Committee comprising industry and CCRA representatives. Through consultation with this committee, we plan to implement the SR&ED Strategic Business Plan to better serve businesses conducting research in Canada.

Work closely with the provinces, territories, and First Nations to provide better services to taxpayers at a reduced cost

We strive to reduce cost to taxpayers by leveraging our systems to do more. Over the planning period, we will continue to demonstrate our ability to administer additional provincial, territorial, and federal programs where we have the capacity to maintain high service standards. For example, we will work to sign more memoranda of understanding (MOU) with provinces and territories, and we will continue to negotiate written agreements related to:

• personal and corporate income tax programs;
• the Business Number;
• workers’ compensation;
• employment status rulings; and
• revenue collections.

The CCRA commitments reported in Service Management Framework (SMF) agreements and in our Annual Reports to the Governments of the Provinces and Territories are important to us. These reports demonstrate that we need to improve performance to maintain current agreements and negotiate new ones. Therefore, we are improving the quality of data in our performance reports and the timeliness of performance evaluations. As well, a revised strategy involving an accountability framework with the provinces and territories is under development. We will build on the success of our Annual Reports to the Governments of the Provinces and Territories by providing better accounting to partners on our effectiveness in service delivery.

We will continue our work with the Federal/Provincial/Territorial Working Group to promote better communication and understanding between the CCRA and the provinces and territories under the Provincial Income Allocation Program. This program safeguards their interests by ensuring that the income of taxpayers operating in multiple jurisdictions is properly allocated among the provinces and territories in which they operate. In 2004-2005, we will begin a pilot project with British Columbia to examine provincial tax revenue risks and include them in our national risk assessment system. We expect that this initiative will expand to other provinces and territories.

Exhibit 3: Anticipated Results and Performance Expectations for Tax Services

Date modified:

2004-10-08