VANCOUVER (Reuters) - Some wealthy Canadians are hiding “substantial” amounts of revenue offshore, Finance Minister Jim Flaherty said on Friday, a day after unveiling a new plan to crack down on tax cheats and pay individuals who come forth with information on them.
Flaherty’s budget on Thursday proposed a series of measures to close tax loopholes and reduce international tax evasion and avoidance, part of a broader effort to boost revenues and eliminate the country’s budget deficit by 2015.
Despite a campaign by the Conservative government since 2006 to discourage use of tax havens and improve tax compliance, Flaherty said there was still a lot of money being hidden from the government.
“There’s still substantial tax avoidance and tax evasion and some of it through quite sophisticated methods by relatively wealthy people,” he told reporters in Vancouver after a speech.
The budget estimated the proposed changes - which range from requiring banks to report international transfers of more than C$10,000 to enhancing corporate anti-loss trading rules - would increase tax revenues by C$4.4 billion ($4.3 billion) over the next five years.
But Flaherty said he expected the additional revenue to be much higher because the tax collection agency is only able to make a partial estimate of how much is currently slipping through the cracks.
“There are some loopholes that the Canada Revenue Agency cannot estimate the results to be, so for those ones we put nothing in the budget,” he said.
Reporting by Brenda Bouw; Writing by Louise Egan; Editing by Bernard Orr