GGFL disappointed promise of tax review absent from Budget
GGFL joins the Chartered Professional Accountants of Canada (CPA Canada) in calling for all federal political parties to propose overhauling Canada’s tax system as part of their forthcoming election platforms.
A new report from CPA Canada, released in advance of the federal budget, urged Finance Minister Bill Morneau to include a promise of a tax overhaul. He didn’t.
CPA Canada wants the federal government to establish an independent expert panel – a mechanism the professional body says is the best way to achieve a modern, world-class tax system.
Canada’s last major overhaul of tax law was in the pre-internet days of 1972.
GGFL’s Head of Tax Chad Saikaley agrees the system is out-of-date and with legislated add-ons over the decades has become a patchwork that is inconsistent and impossible for the average informed Canadian to understand.
“It no longer supports and serves Canadians effectively as it should,” says Chad. “Higher tax rates are hurting our ability to be globally competitive and are discouraging job-creating Canadian entrepreneurs.”
Chad points to the 2017 rules changes to governing Tax On Split Income (TOSI) that has all but ended the ability of small business owners to split their income with family members to lower tax rates – a move, Chad says, that has blunted the ability of risk-taking entrepreneurs to build businesses.
“After decades of patchwork,” he adds, “we need a tax system that supports our economy, supports our social programmes, and realistically reflects the current national and international business environments.
“Compare the way business transactions are conducted in 2019 to the early 1970s when the last major tax overhaul was introduced,” he says. “Consider how a company like Shopify is helping people sell globally. It all points to the need for a modernized system.”
Absent from any mention of substantial tax reform in the budget, GGFL is supporting the push for political party support ahead of the federal election, scheduled for October 2019.
“This isn’t about partisan politics,’ says Chad. “I’d be happy if all the parties agreed to do it.”
In its support for CPA Canada, GGFL is joining a growing chorus that includes parliamentary committees, national business organizations, leading think-tanks, the OECD and the International Monetary Fund.
“The extraordinary level of support for a tax review presents a golden opportunity for the federal government to act,” says Joy Thomas, president and CEO, CPA Canada.
Chartered Professional Accountants of Canada is one of the largest national accounting organizations in the world, representing more than 210,000 members.
This is CPA Canada’s third and final report on the state of Canada’s tax system.