Recently, Minister of National Revenue Kerry-Lynne D. Findlay announced a new three-year strategy to combat Canada’s underground economy, simply titled “Reducing Participation in the Underground Economy.” It was officially tabled in the House of Commons on November 17th, 2014.
The Minister’s Advisory Committee, which held its inaugural meeting that same day, consists of nine national representatives of academia and the industries of construction, finances, hospitality, and retail who have reviewed and endorsed the strategy and will play a key role in advising and overseeing its implementation.
The Committee’s mandate has a number of focuses, including: improving the government’s understanding of taxpayer compliance; contributing to the development of compliance tools; providing advice and analysis of current trends in the underground economy; and helping to identify any and all emerging risks.
The strategy, as overseen by the Canada Revenue Agency (CRA), features three approaches to reducing participation: 1) reducing the social acceptability of participating in the underground economy; 2) improving and refining the CRA’s understanding of this economy; and 3) deploying a range of initiatives to reduce participation and ensure full compliance.
“If left unchallenged, the underground economy will erode the integrity of Canada’s tax system,” said Findlay. “The business environment is ever-changing, and the CRA must stay nimble. We must refine our compliance actions and we must evolve our strategies. That is why our Government is joining forces with industry and taking action. Our three-year plan includes measures to reduce the social acceptability of participating in the underground economy, target high-risk sectors to improve and promote compliance, and ensure a level playing field for hard-working Canadian entrepreneurs and taxpayers.”
“Participation in the underground economy hurts all Canadians,” said Gabe Hayos, Vice President of Taxation for the Chartered Professional Accountants of Canada. “With the new strategy to combat the underground economy, I am pleased that the Canada Revenue Agency and CPA Canada will continue to work together, with taxpayers’ best interest [as] our first priority, to protect the integrity of our tax system and ensure that all Canadians comply with their tax obligations as required by law.”
is a Canadian and US CPA working with clients throughout Canada and the US. Phil advises on cross border tax and financial planning matters. Phil can be reached at email@example.com
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