July 20, 2024

Canadian taxes aren’t just high, they’re needlessly complicated to file

For the average New Zealand worker, tax season is a simple matter of getting a slip from the government informing you whether you have tax owing, or are due for a refund.

Just like in Canada, New Zealand tax authorities already know what workers are earning and what taxes their employer is deducting. They then cross-reference this with a few personal details that are also in their files (marital status, number of children, etc.) and submit an automatic tax return.

“We’ll automatically calculate your income tax assessment at the end of the tax year if we have all your income information,” reads the official website of New Zealand’s Inland Revenue. Similar systems exist in Australia and the U.K., among others.

But as tax season ramps into high gear in Canada, the average citizen is facing an unholy ream of paperwork so daunting that even the Canada Revenue Agency isn’t entirely sure how it all works. An infamous 2017 Auditor General report found that CRA call centres “gave wrong information to callers almost 30 per cent of the time.”

Even in cases where a Canadian citizen receives all their income from government pensions and is not expected to pay income taxes, the feds still require them to submit an annual T1 filled exclusively with information that is already known to the government.

Ottawa knows this is a problem, and is even known to acknowledge as much on occasion. The 2020 Speech from the Throne included a pledge to “introduce free, automatic tax filing for simple returns to ensure citizens receive the benefits they need.”

But no such order was ever transmitted to the minister of national revenue, and only a vague promise appeared in the most recent federal budget. In fact, it’s only gotten more complicated to navigate the tax system.

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