While corporate tax rates fall in Canada, taxes for ordinary citizens go up
The observations of each and every tax consultant in Toronto have found that people earning less have to pay taxes at lower rates. But, a few other statistics show that taxes for ordinary citizens are going up, while corporate tax rates are falling steadily.
Investigation reports and statistical facts
A joint investigation conducted by Toronto Star and Corporate Knights shows that many business houses in Canada are evading tax amounts in billions every year while the common citizens of Canada are struggling to deal with increased tax rates.
It has been found that for every dollar of tax paid by corporations in Canada, citizens pay $3.50. In the last financial year, corporations paid the amount of tax which is equal to the amount of income tax paid by the citizens in 1952. The investigation has also pointed out that 102 biggest business houses of Canada have evaded tax amount of $62.9 billion from 2011 to 2016. These 102 biggest firms pay $10.5 billion less tax than what they should have paid following the declared corporate rate. If such a huge share of the tax gap can be reduced, Canada will be able to use that money in sectors like education, childcare and health.
According to the latest report released by Parliamentary Budget Office, the corporate sector of Canada transferred more than $1.6-trillion in 2018 to the nations having lower tax rates and these nations are known as offshore financial centers. Following this tactic, a lot of Canadian companies evade the taxes they owe to pay.
A separate study has revealed that a huge number of Canadian corporate biggies held $353 billion in 12 of the world’s biggest low-tax nations in 2018. This amount is an all-time high.
Some different datasets show that corporate tax brackets of Canada are not effective to create new jobs. A few statistics have also found that corporate income tax rate-cuts over the last 20 years have not stimulated the rate of new business investments.
Effects and conclusion
Canada’s corporate tax brackets offering tax breaks and cuts have failed to stimulate the market. These had very little positive effects on the economy and the financial conditions of the common citizens have worsened. The government has failed to increase its budget to improve public infrastructure.
Just like other reputed corporate tax consultants in Toronto, at The Accounting and Tax, we help our corporate clients in reaping various tax benefits and credits. But, as an ethical firm, we urge our corporate clients to not accept any tax benefit when the economy is not in good shape. Your extra contributions will be beneficial for common citizens and the entire economy.
