Uncollected tax tally could be $50 billion: report

Uncollected tax from evasion, avoidance and simple mistakes could be almost $50 billion, reveals a report by the Conference Board of Canada (CBoC).

Read: Tax-dodging dentist gets jail time for failing to pay fine

(While the actual amount of uncollected tax is unknown, the report calculates a range of $9 billion to $50 billion by using data about the tax gap in other countries.)

Reclaiming that tax not only increases government revenues but also restores fairness to taxpayers, says the CBoC.

Last year, the CRA set up an offshore tax evasion tip line in the wake of the revelations from the Panama Papers. This, along with other CRA measures, is expected to increase the tax collected by $7.6 billion over five years.

Read: CRA may be watching clients’ social media

But, with the amount of money at stake potentially far greater than that estimated reclamation, the CBoC recommends using advanced data analytics technology to close the tax gap. Other world governments effectively use analytics to reduce fraud and other types of tax evasion, says the report.

For instance, in the U.K., data analytics is used to derive risk profiles and improve the targeting of resources to boost tax compliance. As a result, a 2014 report shows that the U.K. increased its year-to-date tax yield by £2.6 billion while employing 40% fewer staff.

The CBoC also suggests Canada simplifies its tax code and streamlines tax administration, thereby reducing filing errors and increasing the revenue collected by governments.

Read the full report here.

Also read:

IRS can revoke passports of Americans in Canada

CRA minister on tax evasion: “No one will be immune”

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.