The Canadian government is preparing to start implementing the new automated tax filing system that the government recently announced, in order to force non-compliant workers to submit their tax returns. Through this decision, the federal government targets low-income workers in Canada.
Automated tax filing system in Canada
It is worth noting that this new system for automated tax innovation in Canada was proposed for the first time, during the Liberals’ 2023 federal budget.
For its part, the Canadian National Revenue Service (CRA) confirmed last month that it will begin issuing invitations for its service this summer.
But at the same time, the parliamentary budget official explained that until this moment there is no other indication about when automatic tax returns will be implemented and processed in Canada, especially given the lack of a timetable for the actual implementation of this system.
12% of Canadians do not file their taxes
It should also be noted that the Canadian National Revenue Service, in a report for the year 2020, stated that about 12% of Canadians do not file their taxes, but the internal estimates of the Canada Revenue Agency confirmed earlier that the percentage reaches only 7%.
The Parliamentary Budget Officer (PBO) also published a report yesterday, Thursday, including the impact of automated tax filing from the Canada Revenue Agency.
Workers in Canada miss out on big tax breaks
For its part, the Canadian National Income Service has confirmed that many workers in Canada miss out on the large tax exemptions provided by the Department every period, in addition to other benefits that are not obtained by those who do not submit their tax return.
According to the report announced by the Budget Office, Canadians are expected to receive more than $1.6 billion in benefits for the current fiscal year if the automated tax filing system is actually implemented.
Expectations indicate that this number may increase to $1.9 billion during the end of the 5-year period in the fiscal year 2028-2029.
Advantages of the automated tax filing system
It is worth noting that the Canadian National Income Service has clarified that the benefits that Canadians receive are the Canada Child Payment, the Canadian Worker Payment, GST/HST tax credits, and other benefits that are obtained by those who submit their tax returns on time.
Canadian carbon rebate
The Department also indicated that the automatic tax filing system in Canada will also lead to an increase in the number of Canadian families receiving the Canadian carbon deduction in provinces other than British Columbia and Quebec.
Operating an automated tax system in Canada
It is also worth noting that the cost of operating the automated tax system in Canada amounts to about $57 million in the first year of operation of this system.