PARLIAMENT HILL—Tax evasion could become the cause du jour when Parliament resumes next week thanks to a massive data leak about off-shore bank accounts.
The NDP is already attacking the Conservatives about a lack of action on tax evasion and the government is doing its best to downplay lay-offs at the Canada Revenue Agency (CRA) by emphasizing other measures to crack down on tax evaders.
The International Consortium of Investigative Journalists, based in Washington, D.C., received the details of 120,000 offshore bank accounts, 450 of which belong to Canadian residents.
The CBC is now sitting on the details of those Canadian accounts and has so far broken only one story based on the data—an account holding $1.7 million in the Cook Islands for Regina lawyer Tony Merchant, husband of Liberal senator Pana Merchant—and his apparent attempts to avoid a paper trail linking him to the account.
The CBC has not revealed the names of other Canadians with offshore accounts despite calls from the government to do so, because it is not illegal to hold such accounts and it would be unfair to expose people who are not guilty of any crime.
The NDP claims the government has done nothing to stop billions of dollars slipping away through tax evasion.
“For the seventh time in seven years, the Conservatives are talking tough on tax havens but continue to let tax evaders off the hook,” said NDP National Revenue Critic Murray Rankin.
The NDP want Gail Shea, the minister of national revenue, to face the parliamentary finance committee over cuts to the agency’s assessment and compliance divisions that could make it more difficult for the CRA to crack down on evaders.
Canadians for Tax Fairness says that in 2011, tax havens accounted for $130 billion—a quarter of Canadian investment overseas. That’s up from 10 percent in 1987. The group says tax havens are tools millionaires, corporations, and banks use to avoid paying their fair share of taxes.
The government promised measures to crack down on tax cheaters in the 2013 budget but is also cutting the CRA’s budget by $60 million. The CRA’s budget was cut by $253 million in 2012.
Shea has tried to defend the government by pointing to the budget’s plan to strengthen the capacity of the CRA to go after tax evaders.
That plan includes a Crime Stoppers-like program that will pay for tips on major international tax evasions with a percentage of recovered monies.
Banks will also have to report international electronic funds transfers over $10,000 to the CRA.
“Our Government is serious about cracking down on those who attempt to cheat the system. Since 2006, our Government has introduced over 75 measures to improve the integrity of the tax system for the benefit of all Canadians,” said Shea in a recent statement.
The NDP claims those measures are counteracted by cuts to programs that investigate and enforce tax laws.
Tax Evasion Debate Heats Up
Tax evasion has become a hot topic following a massive data leak about off-shore bank accounts.
4/10/2013
Updated: 4/10/2013
