Preparing tax returns can hit Canadian wallets hard, according to a Fraser Institute report released today, which is the deadline for 2013 tax returns.
The Compliance and Administrative Costs of Taxation in Canada found that the price tag attached to the preparation, filing and remittance of taxes ran between $19.2 billion and $24.8 billion in 2011.
Fraser Institute executive vice-president Jason Clemens said the costs include accounting and professional fees and appeals.
“At this time of the year as Canadians file their income tax returns, they clearly see in black and white how much they pay in income and payroll taxes, but the additional costs of complying with the tax code are usually overlooked,” said Clemens. He added that the near-$25 billion cost amounts to 1.4% of GDP.
The price of tax preparation and filing for different types of taxes broke down as:
personal income taxes: $4.6 billion to $6.7 billion;
business taxes: $14.5 billion to $17.8 billion; and
property taxes: $138.6 million to $246.2 million.
The report also said that the estimated cost of tax administration to all levels of government – which includes collecting taxes, maintaining records and managing appeals – was $6.6 billion in 2011.
The heaviest burden, the report states, fell on lower-income Canadians, as their cost of tax compliance was the highest percentage of their incomes compared with those of middle- and upper-income Canadians.
@EmmaCrawfordBIV
