September 2005 Archives

CRA takes measures to prevent sale of illegal cigarettes

The Canada Revenue Agency strengthens its measures to prevent the sale of illegal tobacco products

The Canada Revenue Agency announced that in cooperation with the Royal Canadian Mounted Police (RCMP) and Revenu Québec, the CRA has launched an awareness campaign on the effects of the sale of illegal tobacco products. The campaign reflects the federal government's desire to combat non-compliance with tobacco tax legislation.

"Tobacco contraband activities result in a major loss in revenue, both federally and provincially, and compromise fiscal integrity and government initiatives" according to John McCallum, Minister of National Revenue.

The February 2005 federal budget allocated eight million dollars to the CRA over five years to implement key initiatives at three different stages of the tobacco production and distribution system: enhancements to the stamping and marking regime for manufactured tobacco products, increased audit activities for tobacco manufacturers, and increased monitoring and tracking of raw leaf tobacco.

For the full news release, visit the CRA's web site at:
http://www.cra-arc.gc.ca/newsroom/releases/2005/sep/nr050927-e.html

Surplus Squandered – Spending Jumps 15%

Whatever Happened to the Old Paul Martin? Taxpayers Lament his Disappearance.

Ottawa: The Canadian Taxpayers Federation (CTF) reacted today to the announcement that the federal government’s surplus for the last fiscal year (2004-05) will be $1.6-billion, down from the $3-billion forecast by Finance Minister Ralph Goodale in the February budget. Last year, the surplus was $9.1-billion.

"Ottawa's program spending jumped over $21-billion in a single year and the surplus has been squandered," said CTF federal director John Williamson. "Over the previous three years, the period between 2000-01 and 2003-04, program spending increased by $22.7-billion or 19 per cent. A 15 per cent annual increase can only be described as utterly irresponsible. As Brian Mulroney might have said of the surplus, 'They pissed it all away.'"

"The government re-stated 2004-05 program spending by $4.6-billion, which is the amount of the so-called NDP budget," observed Williamson. "The last budget pegged spending at $158.1-billion and today it has come in at $162.7. It would appear Jack Layton’s two-year budget deal will be delivered twice. This should please the New Democrat opposition, but it leaves taxpayers footing the bill."

"Taxpayers are wondering who is running the Finance Department. The tax-and-spend Liberals or the tax-and-spend New Democrats? It is impossible to tell the difference," concluded Williamson.

John Williamson
Canadian Taxpayers Federation

2005 Tax Competitiveness Report: Unleashing the Canadian Tiger

The C.D. Howe Institute Tax Competitiveness Program has released its 2005 Tax Competitiveness Report: Unleashing the Canadian Tiger.

According to the Institute's web site, "the Report ranks the effective tax rates on investment in 36 developed and leading developing nations, and shows that Canada’s effective tax rates on investment are second-highest among the countries studied, putting future economic growth at risk."

For more information see the Institute's What's New page or access the report directly at:
http://www.cdhowe.org/pdf/commentary_216.pdf

Readers may also be interested in an e-brief released by the Institute that surveys effective tax rates on capital investment in 36 developed and developing nations.

"Attention G-7 Leaders: Investment Taxes Can Harm Your Nations’ Health, reports that most G7 nations now have tax rates on investment among the highest of all countries surveyed, and they must act decisively to restructure their tax systems and improve growth prospects"

The e-brief can be found at;
http://www.cdhowe.org/pdf/ebrief_18.pdf

BC Interest Rates on Outstanding Balances

The British Columbia Ministry of Small Business and Revenue has posted to its web site interest rates in effect from October 1, 2005 to December 31, 2005.

The interest rate charged on outstanding balances and late payments will be 7.50%. The interest rate the BC government pays on overpayments will be 2.50%.

For more information view the web site at:
http://www.rev.gov.bc.ca/itb/WhatNew/interest_rates_oct-dec_2005.htm

BC Budget Update

The British Columbia Ministry of Revenue has issued a recent Budget Update on its web site. The announcement includes:

- A reduction to the General Corporate Income Tax Rate

"Effective July 1, 2005, the general corporate income tax rate will be reduced from 13.5% to 12.0%."

- Addition of Life Science Patents under the International Financial Activity Act

"Effective January 1, 2006, the International Financial Activity (IFA) program is expanded to include refunds of provincial corporate income taxes on income derived from certain patents."

For more information and links to supporting information view the BC Income Taxation Branch web site at:
http://www.rev.gov.bc.ca/itb/2005_budget_update.htm

CRA interest rates for 4th calendar quarter

The Canada Revenue Agency issued the following news release regarding annual interest rates applying to tax amounts owing.

"The Canada Revenue Agency (CRA) today announced the prescribed annual interest rates that will apply to any amounts owed to the CRA and to any amounts the CRA owes to individuals and corporations. These rates are calculated quarterly in accordance with applicable legislation and will be in effect from October 1, 2005, to December 31, 2005."

For the interest rates charged on overdue income and other taxes, please see the CRA web site at:

http://www.cra-arc.gc.ca/newsroom/releases/2005/sep/nr050902-e.html