PACP Committee News Release
If you have any questions or comments regarding the accessibility of this publication, please contact us at accessible@parl.gc.ca.
|
Standing Committee on Public Accounts |
HOUSE OF COMMONS CHAMBRE DES COMMUNES OTTAWA, CANADA K1A 0A6 |
Comité permanent des comptes publics |
For immediate release
NEWS RELEASE
GOVERNMENT COMMITS TO REMOVING UNDUE BENEFIT TO CORPORATE TAXPAYERS
Ottawa, April 14, 2010 -
The government has committed to removing the incentive for corporate taxpayers to keep excessive advance deposits with the Canada Revenue Agency, according to a report of the Standing Committee on Public Accounts presented to the House of Commons today.
In May 2009, the Office of the Auditor General released an audit on the government’s management of advance deposits by corporate taxpayers. The Canada Revenue Agency allows corporate taxpayers to keep deposits with the Agency so they can limit their exposure to possible interest charges for overdue taxes that are the result of a reassessment. The audit found that the Agency did not have a comprehensive policy for managing advance deposits and accepted them without checking the likelihood of reassessment. Moreover, the audit noted that corporations were keeping advance deposits greater than what might be payable under future reassessments, which led to $30 million in excess interest costs for the government in each of the past three fiscal years.
The Public Accounts Committee noted that the Agency had developed an enhanced administrative framework in response to the audit. However, in the Committee’s view this does not address the main reason for excessive advance deposits: the interest rate. The government has been paying interest on advance deposits of two percentage points higher than treasury bills.
The Committee was pleased to note that Budget 2010 committed to reducing the interest rate on advance deposits as of 1 July 2010 to that of treasury bills. The Committee believes that this action should resolve this issue, but nonetheless, the Committee wants to monitor the success of the change and requested information from the government for the next two years on the amount held on advance deposit and the total interest paid.
- 30 -
|