Canadians come clean to taxman on $1.68 billion

Thu Jan 7, 2010 1:21pm EST
 
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OTTAWA (Reuters) - Ottawa has identified C$1.75 billion ($1.68 billion) in unreported income held by Canadians abroad and at home, the government said on Thursday, a welcome find as it focuses on tackling a record budget deficit.

Nearly 8,000 taxpayers came forward voluntarily to disclose the previously unreported assets over the first nine months of the 2009-10 fiscal year, which ends March 31, Revenue Minister Jean-Pierre Blackburn said on Thursday.

It is too early to say how much that will amount to in tax revenue, but Blackburn called the preliminary findings "impressive".

"These are figures that were updated as of January 6. I'm talking about all (voluntary) disclosures in Canada and abroad," Blackburn told reporters on a conference call during a tour of Europe to meet with tax officials.

The amount does not include tax-dodgers' income uncovered by the Revenue Department's own investigations. That is subject to penalties and could add to the eventual financial impact.

In 2008-09, government action, excluding voluntary disclosures, led to 1,596 cases of tax avoidance being identified, bringing in an extra C$738 million, including taxes, interest and penalties.

The federal government expects a 2009-10 budget deficit of C$55.9 billion. Although that shortfall is likely to shrink as extraordinary stimulus spending wanes, many economists are doubtful whether Ottawa can return to a surplus in the five-year time frame it has set for itself.

Homing in on the growing use of offshore tax havens could bring in an extra trickle of cash to government coffers, Blackburn said. Canadians held C$146 billion in these jurisdictions in 2009, compared with C$88 billion six years earlier.

Prime Minister Stephen Harper said in an interview published in the National Post on Thursday that his focus this year will be to ensure the deficit does not become permanent.

(Reporting by Louise Egan; editing by Rob Wilson)