Simplifying Canada’s tax system would make the country more competitive and allow both individuals and business to prosper according to the Canadian Institute of Chartered Accountants (CICA).
The CICA will outline the recommendations of its pre-budget submission before the House of Commons Standing Committee on Finance in Ottawa on October 18.
“Tax regulations are among the top four problematic factors cited by executives for doing business in Canada, according to the World Economic Forum,” says Gabe Hayos, vice president, taxation, CICA. “A willingness to seek change must be emphasized in the tone from top. We are calling on the government to establish a national consultation process to reduce the complexity of Canada’s tax system and ease the regulatory burden placed on Canadian businesses.”
The CICA says federal departments and agencies should shift from the current focus on regulatory enforcement to an approach aimed at helping businesses comply with tax regulations.
In terms of personal income tax, the CICA notes that the federal government has introduced numerous tax credits aimed at incenting certain behaviours. “This only adds complexity to the system,” stresses Hayos. “In our view, broad-based tax reductions would be a more meaningful approach to providing personal income tax relief.”
Other recommendations include reducing the tax on savings and enhancing financial literacy to ensure that individual Canadians can prosper over the longer-term.
The submission applauds the government’s effort to return to a balanced budget by 2014/2015 and a continued commitment to reduce the corporate income tax rate.
To further help Canada prosper, the CICA also recommends measures to encourage innovation, reduce red tape and help internationally trained professionals succeed in their chosen fields.
The CICA submission is available online at www.cica.ca/prebudget2011.