Minister of National Revenue, Diane Lebouthillier, affirmed the government will crack down on tax evasion, in a statement March 5. She also addressed the government’s efforts regarding the KPMG file.
She said that while most middle class Canadians pay their share of taxes, some wealthy individuals avoid paying what they owe using complex tax schemes. “That is unacceptable and it needs to change. The Government of Canada is working hard to crack down on offshore tax evasion and aggressive tax avoidance in order to ensure a tax system that is fair and responsive for all Canadians,” says Lebouthillier.
Uncovered numerous Isle of Man tax schemes
Lebouthillier adds that the Canada Revenue Agency is taking necessary action regarding the KPMG file, including seeking more information through the courts. Through the analysis of additional information, the Minister says the CRA has uncovered numerous additional tax schemes set up in the Isle of Man.
“The CRA is analysing these additional structures to identify any similarities with the KPMG scheme, and, where appropriate, will take all necessary compliance actions,” she said.
Early dispute resolution is in the public interest
While certain media reports referred to the actions of the CRA as “amnesty”, Lebouthillier affirms otherwise. “I would like to clarify that, when deciding whether to pursue compliance orders or other actions before the courts, as a result of audits, the CRA consults the Department of Justice,” she says. “Early dispute resolution, where appropriate, is in the public interest. Litigation is costly for everyone and the outcome of complex, tax-related litigation processes may be unsuccessful.”
Regarding any possible wrongdoing by the CRA in relation to the handling of the KPMG file, the Minister says an independent, third-party review, led by Kimberly Brooks, Associate Professor and former dean of the Schulich School of Law at Dalhousie University, found there was no evidence of such wrongdoing.
After listing accomplishments of the CRA over the past year in dealing with tax cheats, Minister Lebouthillier ended her statement by saying tax evaders will face the consequences of their actions.