From the "i don't know why we pay so much tax" file

Taxman may be letting millions slip away


OTTAWA (CP) -- Federal tax collectors have no good way of judging how many small- and medium-size businesses are cheating on their returns, or who just make mistakes, Auditor General Sheila Fraser reported Tuesday.

Although this is a sector where people are more likely to fudge their taxes, to the tune of millions every year, there's no comprehensive system to pinpoint where the risks are, she said in her latest report on government financial practices.

"It's safe to say that we are losing millions," Fraser told a news conference. "I think how many millions could be an issue of discussions."

She said problems with GST refund claims are a particular problem.

The Canada Revenue Agency conducts selective audits to catch cheaters and those who simply make errors, but doesn't have the information to zero in on the biggest problem areas or to gauge how well enforcement measures work.

The tax gatherers couldn't provide an overall risk analysis to justify the way they audit suspected cheaters or try to catch mistakes.

The agency may also be letting hundreds of millions in GST money slip through its fingers.

In 2002-2003, the agency paid out $29.8 billion in GST refunds on 2.6 million claims. It audited 1.6 per cent of these and found $247 million in overstated claims.
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hmmm, audited 1.6% and found $250Mill o/s? i don't even want to do the math...if they audited everyone with GST claims...they'd find...what? like 15B overstated? this is huge....we are talking about half of all the GST amounts paid out are totally fraudulent.

This is worth looking into i believe. that is an extremely high rate of non compliance.