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What is A Self Supporting Tax System?

Canada Tax System self supporting tax system

As Canadian tax payers one thing we do know for sure is that at some point in time we all will most likely have to pay some amount of tax.   In most cases most of us don’t pay much attention to what our Canada tax system is really all about, and when it is referred to as a self-supporting system we really don’t understand what that means.

Basically it means that you are responsible for determining what your tax obligations are and then following the rules and regulations of the Canada tax laws you submit your taxes according to this.   You are responsible for knowing what your taxable income and obligations are, then figuring out the amount you owe and submitting this to the CRA at the applicable times.

For the most part the tax laws are really intricate, detailed and very difficult to understand.   As a non legal person you are subject to the interpretation of those laws. The CRA has taken all of these laws and put them into what they consider an easier to read format.   In the past these have been condensed into various tax guide books. You used to receive them in your appropriate tax package either through the mail or picking them up at the Post Office or even contacting the CRA to have them mailed out. Now they are conveniently found online at the CRA website.

While these guide books are the CRA’s interpretation of the law and are pretty accurate there are times where these interpretations are challenged in the tax courts, by the tax payer who doesn’t agree with them.

So under this self supporting tax system, you are expected to follow the tax guidelines and prepare your taxes on your own accord.  If once you have filed them and the CRA doesn’t agree with your return then they will notify you.   It is also your responsibility to determine what potential tax benefits apply to you and what expenses if any that you can claim. In other words you really have to be tax savvy to obtain any potential tax breaks.

This is the reason that so many people have decided to utilize professionals such as quality bookkeepers for complex financial accounting, and tax accountants for even simple tax returns.   Nobody enjoys having to do dealings with the tax department so they take great comfort in knowing that their taxes are done right by an experienced accountant in the first place.

While a self supporting tax system appears convenient, it really places the burden of knowledge on the tax payer, and this in itself is no easy task.

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Sam Seidman, CPA, CA, LPA
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