CRA LOSING AT LEAST $18.1B IN TAX GAP

   The tax gap represents the difference between the total amount of taxes that would be paid if every Canadian individual and corporation fully reported all their income properly (including income from the underground economy), took only appropriate expense deductions and properly claimed only the tax credits to which they were entitled compared to the tax actually paid and collected by the Canada Revenue Agency. In short, it’s a measure of the potential loss of tax revenue resulting from tax non-compliance.
   The new report shows that for 2018, Canada’s federal “gross” tax gap was estimated to be between $35.1 billion to $40.4 billion before taking into account the CRA’s compliance and collection activities. Through those ongoing audit and collection efforts, the CRA is expected to ultimately reduce the gap to between $18.1 billion to $23.4 billion, or approximately seven to nine per cent of federal tax revenue. This percentage has been fairly stable over a five-year period, even as Canada’s federal tax revenues haven risen to $272 billion (2018-2019 fiscal year) from $237 billion (2014-2015). The gap in 2014 ranged from $15 billion to $19.1 billion.