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Revenue Canada Can't Keep Up, Say Experts

by Mike Godfrey, Tax-News.com, Washington

17 December 2002


Following the revelation that collapsed energy trader, Enron managed to avoid paying some $93 million in Canadian tax last year, tax experts are suggesting that Revenue Canada is not equal to the challenge presented by the ever more complex tax shelter arrangements which are springing up.

Speaking to the Canadian Press news agency this week, David Perry, senior research associate with the Canadian Tax Foundation explained that companies with high tolerance levels will adopt risky strategies in order to minimize taxes, but that this gamble often pays off, as government auditors fail to spot the shelters.

'The Income Tax Act is huge, it's designed to cover as many possibilities as possible, but it's in some cases years out of date,' he explained, continuing:

'You've got to remember an auditor working to analyse these companies' books probably gets paid between $50,000 and $60,000 a year. They're looking at transaction schemes designed by tax and legal consultants who earn $500 to $1,000 per hour.'

However, Colette Gentes-Hawn, spokeswoman for the Canada Customs and Revenue Agency denied that the CCRA is falling behind in the fight against tax evasion, telling the CP that:

'Everyone has the right to try to minimize their taxes, but we are here to make sure the line isn't being crossed and to ensure the fairness and equity of the tax system for those of us who do pay up.'


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