Thursday, February 15, 2018

Less Than Meets The Eye?

Given its recent rather dubious pursuits of lost tax revenue, I readily admit that I don't know what to make of the latest report that the CRA has actually begun to pursue monies lost to offshore tax havens.

Zach Dubinsky reports the following:
Canada Revenue Agency officers, backed up by police, raided locations in three provinces Wednesday as part of a criminal tax-evasion probe stemming from the Panama Papers, the agency said.

About 30 criminal investigators from the CRA executed three search warrants in the Toronto area, Calgary and West Vancouver, with assistance from the RCMP and the West Vancouver police, the CRA said in a statement online.
My first reaction, upon reading this, was that it was bloody-well about time. However, then I started wondering whether or not this was a move intended more for public consumption than fiscal rectitude in advance of the upcoming federal budget, full of sound and fury and perhaps signifying little.

Consider the evidence.
Last year, CRA assistant commissioner Ted Gallivan told the Star his priority was going after lawyers and accountants who orchestrated offshore tax evasion schemes for “dozens” of clients.

Last month, the Star reported that tax authorities around the world had recovered more than half a billion dollars in tax through their investigations into the Panama Papers.
By contrast, Canada has recovered nothing.

Additionally, in recent months, the CRA has had domestic targets in its sights, targets that in some cases seem like easy, even dishonorable, pickings.

The Guardian from Prince Edward Island reports that citizens, some among our most vulnerable, are feeling the tax man's wrath:
A 25-year-old Stratford woman struggling to pay off her student debt has been hit with a $15,000 tax bill by the Canada Revenue Agency over her tips.

Anita Casey is one of dozens of servers with the Murphy Hospitality Group who received letters three weeks ago saying they were being audited over their tips, retroactive two years.

“It’s pretty crazy that they’re coming after the poor young population who are in school and just trying to support themselves,’’ Casey told The Guardian.
Then there is the CRA operation targeting people's postal codes:
The Canada Revenue Agency's Postal Code Project is targeting the wealthiest neighbourhoods in all regions of the country, those with gold-plated postal codes, where auditors will pore through the tax filings of every well-heeled resident, address by address.

They're looking for undeclared wealth, signs that a taxpayer is actually richer than their income tax filings suggest.

"Comparing someone's lifestyle — cars, boats, houses — to their reported income helps us identify people who are non-compliant," said CRA spokesperson Zoltan Csepregi.
A well-publicized initiative, it has the whiff of class-warfare about it, one that will inevitably prompt some to look upon the wealthy with suspicion and disdain. And perhaps yet another effort at misdirection, given their singular absence of progress on bringing the offshore havens to account?

Our country is renowned for its "snow washing," a testiment to the ease with which money can be hidden and laundered thanks to Canada's laws facilitating shell companies. It will therefore take more than a well-publicized raid to convince me that the Trudeau government and the Canada Revenue Agency are serious about making corporate evaders pay their fair share.

As Fox Mulder would say, "I want to believe." However, I shall wait to see the money before I am convinced that serious changes are underway.

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