Departmental Performance Reports - 2011-2012 Departmental Performance Reports - Section II: Analysis of program activities by strategic outcome
Disclaimer
We do not guarantee the accuracy of this copy of the CRA website.
Scraped Page Content
Section II: Analysis of program activities by strategic outcome
Strategic outcome
Taxpayers meet their obligations and Canada's revenue base is protected.
Program activity 3: Accounts receivable and returns compliance
Program activity description
- Identifying and addressing non-compliance with the registration, filing, remittance and payment requirements of the various Acts administered by the Canada Revenue Agency.
The activities support the prevention, detection and early resolution of non-compliance with filing, reporting, and remitting obligations, as well as, the collection of accounts receivable relating to individual and corporate tax returns, employer source deductions, Goods and Services Tax/Harmonized Sales Tax, other levies, and accounts receivable administered on behalf of other government departments. These activities are achieved by identifying opportunities for program improvements, developing, implementing and maintaining national systems, policies, procedures and guidelines, and the application of business intelligence and technology.
Performance summary and analysis of program activity
Complex intervention
When more serious discrepancies are identified, either through referrals from our early intervention programs or risk-assessment within specialized program areas, we refer files to the appropriate centres of expertise for a more intensive review. Business analytics and risk models help to determine the level of intervention needed.
Each of the following represents one of the CRA's more intensive compliance interventions.
Source deductions
Employers are responsible for withholding, remitting, and reporting payroll deductions. These monies are deemed to be held in trust by employers until they submit them to the CRA. These transactions are processed through CRA's Payroll Deductions system. Given the significant role that businesses play in collecting taxes on behalf of the CRA, we work to ensure the integrity of this process.
Our Trust Examinations Program reviews and examines source deductions and GST/HST collections by businesses.
In 2011-2012, the total value of identified employer compliance activities was $1.7 billion, up slightly from the $1.6 billion we identified last year.
Non-filer/non-registrant
This program is responsible for identifying individuals, corporations, and trusts that do not file tax returns, and businesses that should be registered to collect and remit GST/HST.
We use a graduated approach to address filing and registration non-compliance. This includes sending a letter, calling a taxpayer, or using our specialists to identify taxpayers who have not registered or have outstanding tax returns.
As a result of this program in 2011-2012:
- $2.6 billion in taxes were identified;
- 630,384 returns were identified and filed;
- 8,569 business were identified and registered for GST/HST; and
- 154,671 GST/HST delinquent filers were identified and addressed.
Our actions contributed to 99% of corporations and 97.5% of individuals filing their returns within five years of the filing due date.
The CRA is always looking at new methods to encourage taxpayers to comply. This year we launched a project to send new GST/HST registrants and employers automated reminders of the dates that their returns and payments were due. We found that the registrants we contacted were 12% more likely to comply than those we did not contact. These results are encouraging and we will continue to test this reminder service for new businesses in 2012-2013.
Payment of tax debt
The final step in our compliance review process is to ensure that taxpayers pay any amounts due. An effective debt resolution program is a critical element in addressing non-compliance and protecting Canada's revenue base.
We processed approximately $419 billion in taxes and duties last year. Of this amount, more than $411 billion was received within the 2011-2012 reporting period. Our receivables inventory that is less than one year old is $7.5 billion or about 1.8% of the gross receipts.
Over the past five years, our data indicates that most individuals and businesses pay their taxes on time, and continue to surpass our 90% target.
When taxpayers have not met their obligations, we use a range of enforcement actions with varying degrees of intervention.
It has been determined that our ability to collect a debt depends on both timely and efficient debt collection, as the longer the debt exists, the harder and more expensive it is to collect. We rely on approaches that favour swift actions, such as our Debt Management Call Centre, which addresses high-volume, low-risk tax debt at minimal cost, and allows our collection agents in tax services office across Canada to focus on addressing more complex and higher-risk accounts.
We continue to pursue more risk-responsive enforcement approaches to address non-compliance in our Accounts Receivable programs. We continue to update our strategies to respond to newer workloads and to increase our efficiency. Initiatives such as the Accounts Receivable National Inventory model, introduced in April 2011, and the professional sector pilot project aim to make our inventory management process more efficient.
- This past year, our tax services office agents resolved 61.6% of this new debt within the year of intake, surpassing our objective of 60%.
- The $18.4 billion tax debt we resolved in our tax services offices represents 94% of the dollar value of the intake of new debt in the past year.
Lessons learned
The CRA's graduated approach to early intervention, complex intervention, enforcement and payment of tax debt has proven to be efficient and effective. Long-term filing rates for individuals, corporations, and charities are close to 100%. We also found that 90% of corporations and 94% of individuals remitted their taxes on time, and our debt management efforts resolved $40 billion of tax debt. We also launched a project to send new GST/HST registrants and employers automated message reminders of the dates that their returns and payments were due. Registrants contacted were 12% more likely to be compliant than those who were not contacted. We will continue to test this reminder service for new business in 2012-2013.
We will continue to pursue more risk responsive enforcement approaches to address non-compliance in our Accounts Receivable Programs and we will evolve our strategies to respond to newer workloads.
- Date modified:
- 2012-11-08