A survey by the Canadian Financial Executives Research Foundation has found that the HST is among some of the recent changes in regulatory and compliance requirements that are leading corporate tax managers to neglect strategic tax planning.
About 40% of companies surveyed said resource constraints are among the most significant challenges they face this year and in 2011.
Many companies dealing with the HST conversion are also worried about the implications for increased audit risk. The only way for them to get any comfort around their numbers is to invest more time double-checking the changes.
The study suggests that increasing complexity and uncertainty in the areas of transfer pricing, foreign income taxes, corporate income tax and national and foreign value-added taxes take away resources from long-term planning, which can cut future costs to Canadian businesses.
The survey also found that about 60% of respondents said they are concerned about the lack of skilled tax management talent in the Canadian labour market.
Michael Conway, CEO and national president of Financial Executives International of Canada, said, “Many will be turning to the tax expertise of external consultants or simply have to do more work with the current pool of talent and resources they already have, putting even more strain on already stretched financial departments.”