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Canada would benefit from undertaking accurate tax gap analyses, says a new report, which attempts to estimate the amount of revenue that goes uncollected each year.
A new briefing by the Conference Board, commissioned by the SAS Institute, says that the tax gap – the amount of revenue that is lost due to non-collection, error, or evasion – could be as low as CAD8.9bn (USD6.8bn) or as high as CAD47.8bn.
The report says the Government should apply more sophisticated evaluation and auditing techniques, engage in regular consultations with other tax administrations, and make increased use of data analytics to boost revenue collections. Measures to simplify the tax code and smooth tax administration could help reduce filing errors and increase revenue collection, it added.
"When some individuals and companies do not pay their fair share of taxes, it increases the burden of funding public services on compliant taxpayers," said Matthew Stewart, Associate Director, National Forecast at The Conference Board of Canada. "It is not easy to estimate the tax gap, but doing so is an important step in eventually collecting the revenues that support government activities."
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