Thursday, February 07, 2008

Canadian tax collection

While defending the merits of harmonization between the GST and provincial sales taxes, the head of the Canada Revenue Agency confessed the CRA's largesse:

"This isn't about being bigger. We're already the biggest federal institution there is, except for the military,'' [William] Baker said. "It's about what makes sense.''

With 46,000 employees, an annual budget of $3-$4 billion and annual collections of $350 billion, CRA "is a big organization,'' said Baker, who joined CRA's predecessor, Revenue Canada, in 1987 after launching his public service career in Saskatchewan in 1979.

With more than 10,000 financial experts and 4,000 IT professionals on the payroll, CRA is better equipped to collect and dispense billions of dollars of revenues and benefits than any provincial or territorial government.

Our government spends a lot just to get more from us. Not only does this defend tax harmonization, it also defends tax simplification. Ontario's harmonization of corporate taxes to federal rates saved that province $100 million. How much more could simpler systems slash government budgets and save taxpayers?


Dennis Prouse said...

Due to the fact that he is a public servant, the gentleman in question couldn't address the fundamental economic reasons for harmonization. Provincial sales taxes pose a tremendous burden on businesses - transforming them into a true value added tax, rather than straight sales tax, reduces the tax burden on businesses, and instantly makes Canada more competitive from a business tax perspective.

The province of Saskatchewan says it is concerned about shifting the burden from businesses to consumers. Well, guess what -- that is what sales taxes were always supposed to do. The fact that businesses now bear 40% of the brunt of provincial sales taxes, and are unable to claim them back, is a purely unintended consequence.

It is time for Ontario, BC, Saskatchewan, Manitoba, and PEI, (yes, PEI!) to get with the program and start negotiating with Ottawa on harmonization. Every last one of those governments would acknowledge privately that this makes public policy sense - they just fear the political backlash. The feds, however, have already said that they would consider compensating the provinces for lost revenue in the first few years, so there is really no excuse not to proceed.

Serge Benvenuti is a scumbag said...

More example of wasted tax dollars at CRA:

CTF You Tube Channel

Canadian Taxpayers Federation's Fan Box