Les Canadiens sont confrontés aujourd’hui à un système fiscal beaucoup plus complexe qu’il y a quelques décennies. Entre 1990 et 2018, la surface de texte de la Loi de l’impôt sur le revenu et des règlements connexes a augmenté de 72 %.
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Tax complexity matters to all Canadians, mostly owing to the considerable resources and time that families and businesses spend on compliance.
Many of us incur substantial costs: time invested and money spent on professional legal and accounting services, and on tax preparers and tax software. Further, the Canadian tax system is recognized as being complex, hard to understand, and in urgent need of reform.
This study uses three broad categories of indicators to measure tax complexity: tax expenditures, tax legislation, and tax guides. Each indicator empirically measures a different aspect of tax complexity, and all three indicate that Canada’s tax system has become increasingly complex since 1996.
The number of federal personal income tax (PIT) tax expenditures increased from 111 to 146 (32 percent) from 1996 to 2016. The number of federal corporate income tax (CIT) tax expenditures increased from 66 to 76 (15 percent), and the number of federal goods and services tax (GST) expenditures increased too, but to a lesser degree (9 percent).The dollar value of federal tax expenditures has also markedly increased over the same period. PIT tax expenditures have grown by 55 percent, adjusted for inflation, while corporate income tax expenditures and GST tax expenditures grew by 51 percent and 48 percent respectively.
Unlike countries such as the United Kingdom, Canada has not recently tried to simplify the tax system and has demonstrated little concerted effort at regulatory reduction or simplification.
What is clear is that our indicators suggest an increase in federal tax complexity since the turn of the century: the number of credits, deductions, exemptions, exclusions, and other preferences, the text length of tax legislation, and the size of the federal personal income tax guide all increased by double-digit percentages. Federal tax complexity is clearly increasing in Canada over time.