By Fraser Institute ——Bio and Archives--April 30, 2024
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VANCOUVER—Total compliance costs for filing personal income taxes in 2023 are estimated at $130 per Canadian tax filer, or $4.2 billion altogether, finds a new study published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“Overall, compliance costs for personal income taxes and payroll taxes represent a significant expense for Canadians in order to facilitate a process already widely regarded by many Canadians as a financial strain,” said Jake Fuss, director of fiscal studies at the Fraser Institute.
Personal Income Tax Compliance for Canadians: How and at What Cost? uses a new survey and finds that roughly half of tax filers (50 per cent) prepared their 2022 income tax return themselves while more than one third (37 per cent) used a paid tax preparer.
Those preparing their own return tax report do so mainly (85 per cent of self preparers) using some form of software.
The total compliance costs associated with filing 2022 personal income taxes, estimated at $4.2 billion, is equivalent to 0.15 per cent of national GDP. Furthermore, the total administrative and compliance costs of collecting taxes in Canada is calculated to be 0.6 per cent of GDP.
The study suggests that one way to reduce these compliance costs is to produce prefilled income tax reports for Canadians, streamlining the process for taxpayers. Producing prefilled reports is estimated to result in a drop of one third in total personal income tax compliance costs for Canadians.
“If this process was more effectively streamlined for the Canadian taxpayer, the federal government would be saving them not only money, but time, another valuable resource expended during tax season,” said Fuss.
Media Contact:
Jake Fuss, Director, Fiscal Studies, Fraser Institute
To arrange media interviews or for more information, please contact:
Drue MacPherson, Fraser Institute
604-688-0221 ext. 721
drue.macpherson@fraserinstitute.org
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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 86 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute’s independence, it does not accept grants from governments or contracts for research. Visit fraserinstitute.org.
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