What’s ailing Canada’s tax system

Canada’s “outdated” and “overly complex” tax system is hurting the country’s competitiveness and costing taxpayers, a new report from the Chartered Professional Accountants of Canada says.

“Canada’s tax system: What’s so wrong and why it matters” says the system needs to do more to help businesses grow and innovate, and to ensure personal tax compliance. Tax expenditures make the system more complex, the report says, without necessarily achieving the intended goals in a cost-effective manner, and there may be better ways to deliver social benefits.

CPA Canada has long called for a comprehensive review of the tax system, and various other organizations have done the same, including the C.D. Howe Institute, the Senate finance committee and the OECD.

The CPA’s new report says tax complexity makes it harder for lower-income and vulnerable Canadians to benefit from income supports in the system. It also creates a larger compliance burden for small business owners and their advisors.

Canada has also lost its competitive edge when it comes to both personal and corporate taxes, the report says, hurting foreign investment. And innovation isn’t sufficiently encouraged through credits and other programs.

Download the full report here.

Staff

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