The pointy-heads at the Canada Revenue Agency have a strange sense of humour.
They kicked off tax filing season by telling Canadians they’ve made filing a return faster and easier this year. That must be why the CRA doubled the length of income tax returns from four to eight pages – in addition to all those fun and user-friendly schedules, worksheets and information forms, of course.
It’s nice to see the CRA taking our complaints about convoluted forms and guides to heart. “Our government is committed to modernizing the CRA and making sure it provides people-first service to Canadians,” Minister of National Revenue Diane Lebouthillier said in a recent statement.
Folks, it’s hard to know whether to laugh or cry. But if the Liberal government is serious about putting people first, the solution is simple: Make the CRA do our taxes for us.
It’s not a stretch. The CRA automatically receives information about the employment and investment income for most Canadians, so let its computers fill out the forms and do the math on our behalf for free. Numerous countries use such systems, so why not Canada?
Some of us learned how to do our taxes in high school. But in recent years, filling out a paper return has become so complicated and stressful only a masochist would attempt it.
It’s unseemly because the CRA is effectively pushing people to pay third parties, typically software providers or professional tax preparers, fees to access their own money. (Yes, there’s free software but there’s generally no phone support if you get stuck, and incessant pushing to upgrade to paid versions.)
Consider this: 62 per cent of people who file tax returns are owed money from the government. The average refund was $1,740 last year. One would be hard-pressed to find a Canadian who doesn’t believe that every penny counts.
“I think there is value in the software, but it does raise the fundamental question of why anyone should actually have to pay anything to get their own money back,” said Jamie Golombek, managing director of tax and estate planning at Canadian Imperial Bank of Commerce.
“It would be wonderful to see a situation where effectively you get a prepopulated digital return, which has all your income and deductions that it [the CRA] knows about there. And you either sign off on it, ‘yes’ or ‘no,’ or add any additional lines that are relevant and then submit it. That would be the best-case scenario."
Already 36 countries, including Britain, Germany, Japan and the Netherlands, allow return-free tax filing for some taxpayers, according to the Tax Policy Center’s briefing book.
Such systems spare many individuals the agony of preparing their own returns because there’s an assumption that all taxes on income are paid at source, Mr. Golombek said.
A hassle-free system could also exist in Canada since most people receive tax slips each year. Our employers and money managers automatically file that same income information to the CRA, meaning it’s redundant for Ottawa to expect individuals to prepare and file a return.
Already, the CRA does allow some people to autofill their returns as long as they have a registered account and are using NETFILE-certified software. But when I tried to register for an account numerous times this week, I kept getting a warning on my computer stating: “This site can’t provide a secure connection.” It’s not exactly a ringing endorsement.
The point remains, however, if the CRA can autofill returns for some Canadians, it should automatically do it for all of us. Individuals could then review and tweak their returns as required without incurring any costs.
At present, the only people the CRA are putting first are those in the tax-preparation industry, and they’re profiting handsomely off Ottawa’s confusion and decades-long push for people to file electronic returns.
Currently, almost 90 per cent of Canadians file their taxes electronically. It’s also estimated that Canadians spend $7-billion complying with the personal income tax system each year, according to the Fraser Institute.
No Canadian should have to incur out-of-pocket costs to file a return and get a refund. Paying taxes is painful enough.