SMEs paid more in terms of share of revenues than larger counterparts, according to Fraser Institute
VANCOUVER—Canadians paid between $19.2- and $24.8-billion to prepare, file and remit payment for personal income taxes, property taxes, and business taxes in 2011, according to a new report.
The Fraser Institute report, The Compliance and Administrative Costs of Taxation in Canada, found that the dollar cost of complying with business taxes is lower for small- and medium-sized businesses, but as a share of revenues, it is actually higher than for larger businesses.
“At this time of the year as Canadians file their income tax returns, they clearly see in black and white how much they pay in income and payroll taxes, but the additional costs of complying with the tax code are usually overlooked,” Fraser Institute executive vice-president Jason Clemens said in a statement.
“By adding up taxpayers’ personal time and effort to file their returns and all expenses associated with accounting and professional fees and appeals, we find a high cost of up to $25-billion, or 1.4 per cent of GDP, for tax compliance in 2011.”
The report includes a foreword by Anthony Ariganello, president and CEO of the Certified General Accountants Association of Canada, warning about the economic costs of overly burdensome tax codes.
“Canada’s tax system can act as a barrier to business, investment, competitiveness, and economic growth,” Ariganello wrote in the report.
“Tax simplification would provide countless economic benefits-including lower costs for both tax compliance and administration-which translates into more money in the pockets of Canadians and a likely boost to the Canadian economy.”
The report also estimates the government cost of tax administration—collecting taxes, maintaining records and managing appeals at the federal, provincial and municipal levels—to be $6.6-billion in 2011.