Four reasons behind Canada's tangled tax laws
The majority of tax complications, he said, can be chalked up to four main reasons.
First, politicians in search of votes have been more than happy to add special regulations that favor one sector of business or group of taxpayers over another. Citing figures from Finance Canada, he said there were over 260 tax breaks available to taxpayers in 2021, including non-taxation of lottery winnings, tax deductions for union dues (strike pay is not taxable), and tax credits for digital news subscriptions in Canada.
“What we really need is a level-playing field: one set of rules with as few exceptions and credits as possible,” he said.
He also took aim at often-misguided government initiatives. He held up the notion of small business support as an example; while small businesses are often held up as the backbone of the economy, he noted that only 22% of jobs in Canada are held by companies with fewer than 20 employees, while 58% are at companies with more than 100 employees, according to Statistics Canada.
In addition, he said major accounting and legal firms, along with their governing bodies, are enabling the situation. Because their bread and butter is in guiding clients through tax complexity – and charging rich fees in the process – they tend to make token pleas for tax simplification.
