TaxPersonal TaxCanadian online filing loophole costs $569m

Canadian online filing loophole costs $569m

Gaps in an online filing system creates sizeable shortfall for the Canadian taxman

A loophole in the Canadian online filing system has cost the overseas taxman
about $US569m (£299.5m) in unpaid taxes.

Loopholes in the Netfile system, such as not having to demonstrate physical
proof of earnings, made submitting inaccurate returns easier. Approximately 15%
of the sample returns filed online were deemed ‘non-compliant’, leading to the
shortfall.

A group of analysts working for the Canadian Revenue Agency made the find
after examining a number of random internet returns for the 2005 financial year,
tax-news.com
reported.

According to CRA findings, taxpayers who had filed hard-copy returns were
more likely to have fully complied with the tax laws.

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