For most people, it’s about as pleasant an activity as undergoing a colonoscopy.
Doing one’s tax return is a chore average Canadians would gladly put off indefinitely, but as the April 30 deadline looms a new survey indicates that a majority of us feel it’s our civic duty to faithfully carry it out every year.
Of the 94 per cent of Canadians who file their tax forms each year, more than half – 52 per cent – say they file them because it’s “the right thing to do,” according to the Bank of Montreal`s Psychology of Taxes Study released Friday.
The study also found that 28 per cent of those polled said they regularly file because they expect a refund, 22 per cent stated that not filing annually ends up getting too complicated and 11 per cent admitted to being scared of getting audited.
“Obviously, there’s still a lot of grumbling [over filing]. It’s a bit of a chore and people try to put it off as long as they can,” said John Waters, vice president and head of tax and estate planning in the wealth planning group at BMO Nesbitt Burns.
Still, “it’s ingrained in our society that’s it’s the right thing to do,” he said.
One wonders about the possible psychological impact of this week’s leaking of secrets regarding the sheltering of billions of dollars in offshore tax havens by the world’s wealthy.
Will the news help make taxpayers more cynical and less inclined to be such reliable filers?
“The conversations in the Tim Hortons all over Canada [on this topic] are no doubt about how this is just another example of how ordinary folks get screwed,” said Timothy Pychyl, associate professor of psychology and procrastination expert at Carleton University.
But the average reaction is no doubt to say “that’s just the way the world works,” he said.
Mr. Pychyl also wonders how reliable self-reporting surveys are in terms of truthful answers.
“Taxes are enormously aversive. The real reason [for a majority saying it’s the right thing to do] is more likely a combination of ‘right thing to do’ and not wanting to get punished,” he said.
The BMO Nesbitt Burns survey also looked into why Canadians who don’t file regularly choose not to.
One quarter – 24 per cent – say they are too busy to bother, 20 per cent say they don’t know how to file their taxes and 17 per cent feel they don’t make enough money to justify filing.
Mr. Waters said those who find tax preparation daunting or too time-consuming should consult with a tax professional so as to be able to make the deadline and avoid possibly getting hit with interest or penalties on any tax owing.
“If you owe money to the government, be sure to pay it promptly to avoid penalties or problems down the road. Conversely, if you are expecting a refund, the sooner you file the sooner you will get your refund which could be used to pay down debt or add to your savings.”
The online survey was conducted with a sample of 1,002 Canadians between March 15 and March 19, 2013. The margin of error for a probability sample of this size is plus or minus 3.1 per cent, 19 times out of 20.Report Typo/Error