Study
| EST. READ TIME 1 MIN.Compliance costs for Canadians filing personal income taxes in 2023 estimated at $4.2 billion
Personal Income Tax Compliance for Canadians: How and at What Cost?
- The key purpose of this study is to estimate the resources expended by individuals in complying with the Canadian personal income tax/payroll tax system in 2023.
- Roughly half of tax filers (50%) prepared their 2022 income tax return themselves while more than a third (37%) used a paid tax preparer. Those preparing their own return tax report do so mainly (85% of self preparers) using some form of software.
- On average, individual Canadian tax filers spent 1.5 hours on personal income tax compliance activities and spent $88 on out-of-pocket expenses.
- Accounting or the value of time spent on compliance, the total cost of compliance amounts to $130 per Canadian tax filer.
- The total compliance costs associated with filing 2022 personal income taxes are estimated at $4.2 billion, which is equivalent to 0.15% of national GDP. Furthermore, the total administrative and compliance costs of collecting taxes in Canada is equivalent to 0.6% of GDP.
- One way to reduce these compliance costs is to produce prefilled income tax reports for Canadians. The study simulates the impact of prefilled tax returns and calculates a drop of one third in total compliance costs.
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François Vaillancourt
François Vaillancourt is an emeritus professor in the department of economic sciences at the University of Montreal where he taughtfrom 1976 to 2011. He completed his Ph.D. in economics at Queen’s University in 1978 and received a Doctorate honoris causa from the University of Geneva in 2021 for his pioneering work in the economics of language. Professor Vaillancourt was a Fulbright scholar in 2007 in Atlanta and was elected to the Royal Society of Canada in 2009. He was the Shastri lecturer in India has been a guest lecturer at the University of Toronto and Australian National University and a research scholar at the Institute for Research in Public Policy (1992-2000) and the C.D. Howe Institute (2000-2003). Professor Vaillancourt was also a research coordinator(Income distribution and Income security) for the MacDonald Commission (1983-1986). He has consulted for a number of international organizations such as the IMF, the World Bank, OECD, UNDP and national agencies such as Statistics Canada, Finance Canada, and the Seguin Commission. His fields of research include linguistic policies, intergovernmental financial relations, and tax compliance costs. He has published on a wide variety of issues including equalization in federal countries, education, minority language policies, federalism, and taxation. Professor Vaillancourt is widely acknowledged as one of the pre-eminent scholars on the issue of tax compliance and administrative costs.… Read more Read Less… -
Nathaniel Li
Senior Economist, Fraser Institute
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