Canadian Treasurer

April 29, 2013

Taxpayers and businesses spent up to $25 Billion in 2011 to comply with tax code

VANCOUVER – It cost Canadians between $19.2 billion and $24.8 billion to prepare, file and remit payment for personal income taxes, property taxes and business taxes in 2011, finds a new report from the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

"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," said Jason Clemens, Fraser Institute executive vice-president.

"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 study calculates the 2011 cost to taxpayers for preparing and filing:

  • Personal income taxes: Between $4.6 billion to $6.7 billion

  • Business taxes: Between $14.5 billion and $17.8 billion

  • Property taxes: Between $138.6 million and $246.2 million

The report also estimates the government cost of tax administration (e.g. collecting taxes, maintaining records and managing appeals at the federal, provincial and municipal levels) to be $6.6 billion in 2011.

The study also found that the heaviest burden of complying with the tax code was imposed on those least able to carry it.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.




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