Posted March 13, 2018 09:54:01 Canadian corporations are paying a “fair” corporate tax rate of between 1.7 per cent and 3.2 per cent, according to a new study.
The findings were published Monday by the Canada Revenue Agency.
“We’re paying a fair rate of tax because Canada is a progressive country,” said David Macdonald, chief economist at the C.D. Howe Institute, which conducted the study.
The study looked at corporate tax returns for companies in Canada and across the United States from 2013 to 2019. “
That’s very, very low compared to some of the countries we pay our taxes to, such as Britain, Ireland, Ireland and New Zealand.”
The study looked at corporate tax returns for companies in Canada and across the United States from 2013 to 2019.
The CRA analyzed a total of 4.5 billion returns and determined the total amount of corporate income tax paid in Canada was $4.1 trillion.
The average tax rate was 1.72 per cent in 2019, with the average rate of 3.6 per cent reported in 2019.
In contrast, the average tax rates paid by Canadian companies were about 2.1 per cent to 3.4 per cent.
Macdonald said there were two major reasons corporations are “unfairly” paying the higher rate: they are not filing their taxes, and they are deferring paying taxes.
“I think the first reason is a little bit unfair,” Macdonald told CBC News.
A number of measures have been put in place to encourage companies to file their returns. “
When companies do not file their taxes and defer paying taxes, they are paying tax that is not fair.”
A number of measures have been put in place to encourage companies to file their returns.
MacDonald said the CRA is currently examining measures that will increase the number of taxpayers filing tax returns, but he said that will not change the overall fairness of the system.
“They have got to go through a process and if they can do that, it’s fair.
If they can’t do that then it’s unfair,” he said.
MacMcdonald said it is difficult to determine exactly how much money companies are taking out in deferred taxes.
But he said it’s likely to be significantly higher than the amount the government pays in corporate taxes.
The Canada Revenue Act is a “bail-in” system where the CRA will automatically pay a portion of the corporate tax to the provinces.
The government has proposed changing the tax code to increase the amount of revenue that provinces would be able to collect from companies.
The federal government has also proposed reducing corporate taxes to 2.2 cents per dollar of revenues.
The Liberal government is expected to introduce a similar corporate tax reform in the next fiscal year.