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Does Zapper Software Affect You As a Tax Payer?

tax evasion using zapper software

When it comes to your taxes really all you want to be concerned about is how much you have to pay and getting your tax return in on time. At least that is the big focus during tax season.   The rest of the year you may relax a little and from time to time look at the Canada tax situation on the whole. You may be in that group of individuals who is really disgruntled about how much that we as Canadians are taxed. You may also be amongst those who think that the CRA is great at targeting the small tax payer who is remiss on their taxes and ignores the big tax evaders. You may not however be aware of how technology could be adversely affecting taxes in Canada like the Zapper software.

This is not a tax accounting software that helps people with their taxes. In fact, it is a method that some businesses are using to reduce their tax obligations in an illegal manner. It is applicable to mostly retail and restaurants where the software works quite effectively.

Basically what it does is lets the business erase their sales transactions from their electronic cash registers.  The zappers are usually used on a USB key, but another system called phantomware comes direct installed on the software that operates the terminal.

The end result of either of these is the production of sales records that do not reflect an accurate accounting. As such, it potentially means less revenue declared therefor less tax to be paid.

Bottom line is the businesses using these devices are robbing the tax coffers of the government but in reality are robbing you the tax payer. After all one of the reasons our taxes go up is because we don’t have enough money in the government tax account to cover all the expenses. So this problem trickles down the line to you as the tax payer to increase your tax contributions to make up the deficit.

The CRA is well aware of this form of tax evasion and they have come up with new rules that anyone caught using these tax evasion technology could be hit with a fine anywhere between $5,000 up to $1 million dollars, and if criminally charged and found guilt could end up in jail with a five year sentence. Not only are these new rules applicable to a user but also for those caught developing them or selling them.

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Sam Seidman, CPA, CA, LPA
629 Sheppard Avenue West
Toronto, Ontario
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Chartered Professional Accountant, Chartered Accountant, Licensed Public Accountant

Email: sam@torontoaccountant.ca

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