Tax Cheats Be Warned: Feds Looking at You!
It would seem that the Federal Government under Justin Trudeau is doubling down on efforts to catch tax cheats with a massive increase in spending in the new Federal Budget earmarked to try and do just that.
In the just released budget the Feds up their game by increasing the amount being spent by almost double what they spent last year on the same issue.
The Federal budget handed down by Finance Minister Bill Morneau this past week tags an additional $5 Billion in spending to uncover those who may seek to dodge their responsibilities to the Feds by withholding or refusing to pay the correct amount of tax.
The funds will be used a variety of ways to make sure that all Canadians pay their fair share into the Government coffers with a large portion of the money intended for the hiring of new auditors and those investigative specialists who have experience in investigating the “underground economy” in the hospitality and construction sectors that deal in large amounts of cash that avoids the paying of Federal tax and costs the Feds bundles of money every year.
A portion will also be earmarked to upgrade the quality of the investigative work currently being done to target criminal and serial tax evaders and to set up business intelligence infrastructure and risk assessment programs designed to target highly abusive tax avoidance cases and international players who are considered high risk offenders.
The plan is not intended to target those in the lower income brackets but will certainly not turn a blind eye to the lower denomination offender but will seek out those who are in the extreme high income brackets who methodically and cravenly refuse to pay the share they are required under the current tax laws and structures.
The budget signals that the Feds intend to close the loopholes that many high earners use to either avoid altogether of defer taxes for lengths of time such as the use of offsetting derivative positions in what are commonly called “straddle positions”.
The Government expects to realize a return of over 5-1 on the expenditures relating to tax crime meaning that for every dollar they expect to spend they will recoup at least 5 back with the steps and programs put in place.
While the measures they are enacting will certainly not end tax evasion or avoidance altogether, it most definitely shows that the Feds are not nearly finished in the efforts to bring to heel those who seek to avoid their financial responsibilities to the Federal Government.
While the budget may not make everyone happy these programs will certainly resonate with the regular Canadians who are tired of seeing the very wealthy game the system while they pay more than they can afford year after year after year.