OTTAWA, Oct. 3, 2018 /CNW/ - Canada is not as proactive as many of its international peers in terms of reviewing or reforming its tax system, according to a new report by Chartered Professional Accountants of Canada (CPA Canada).
International Trends in Tax Reform: Canada is Losing Ground is the first in a series of three reports on Canada's tax system to be released this fall by CPA Canada. The report documents how Canada is falling behind other jurisdictions such as the United States, the United Kingdom, New Zealand and Japan where efforts are being taken to keep their tax systems competitive.
CPA Canada has long called for a comprehensive review of our country's tax system to eliminate inefficiencies, improve fairness and ensure economic competitiveness. The last comprehensive review was carried out in the 1960s and the business landscape and society have changed significantly since then.
"Canada needs to act now more than ever, or we will be left trailing the pack," stresses Bruce Ball, vice-president, tax, with CPA Canada. "The report is valuable in that in provides context around what is happening on the global stage and it reinforces why we are witnessing a call to action in this country."
There is a groundswell of support for a tax review – from other national organizations, leading think-tanks, parliamentary committees, the Advisory Council on Economic Growth and even international bodies such as Organisation for Economic Co-operation and Development and the International Monetary Fund.
Key findings of the CPA Canada report include:
- Canada's top combined personal income tax rate is at 53.53 per cent in Ontario, which is the third highest in the G7. More concerning is that the highest top statutory personal tax bracket kicks in at a much lower level of income compared to other G7 countries
- Canada's corporate tax advantage has been eliminated by U.S. tax reform measures, presenting a serious competitive threat. With the corporate income tax differential gone, other deficiencies – including tax complexity and overregulation – are becoming key factors impeding business investment
- Canada is also behind in terms of its tax mix, relying on personal and corporate taxes to raise government revenues. Economists believe a disproportionate reliance on income taxes – rather than consumption taxes – leads to larger economic costs
Upcoming reports in this series will address the major problems and harmful impacts of Canada's current tax system. The research will explore the lessons learned from other countries in more detail and how that information could be applied to the optimal design of a tax review to benefit all Canadians.
To view the first report, visit www.cpacanada.ca/taxtrends
About CPA Canada
Chartered Professional Accountants of Canada (CPA Canada) is one of the largest national accounting organizations in the world, representing more than 210,000 members. Domestically, CPA Canada works cooperatively with the provincial and territorial CPA bodies who are charged with regulating the profession. Globally, it works together with the International Federation of Accountants and the Global Accounting Alliance to build a stronger accounting profession worldwide. CPA Canada, created through the unification of three legacy accounting designations, is a respected voice in the business, government, education and non-profit sectors and champions sustainable economic growth and social development. The unified organization is celebrating five years of serving the profession, advocating for the public interest and supporting the setting of accounting, auditing and assurance standards. CPA Canada develops leading-edge thought leadership, research, guidance and educational programs to ensure its members are equipped to drive success and shape the future. cpacanada.ca
SOURCE CPA Canada
please contact: Alida Flannery, Issues & Stakeholder Communications Manager, Chartered Professional Accountants of Canada, Telephone: 416-204-3951, Cell: 647-285-5218, Email: [email protected]
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