In early November, the finance minister of Ontario said in the province’s fall economic statement that “stronger economic growth and new jobs are the surest, fairest path to higher revenues and a balanced budget.”
But the Canadian province is looking for another way as well to chip away at its $11.7 billion CAD deficit. To recover more revenue without raising taxes, Finance Minister Charles Sousa says he will crack down on tax fraud and black market businesses.
“We have a number of companies who choose to come to Ontario, who set up shop, do their business – and then find themselves competing against other companies operating here and not paying their fair share,” he told The Globe and Mail of Toronto. “I have to find a way to make sure everyone’s on the same level.”
One strategy involves installing “black boxes” on cash registers around Ontario. They will record sales data and ensure owners aren’t cheating on their taxes. It’s a strategy borrowed from neighboring Quebec, which has raised $300 million CAD annually thanks to the installation of 32,000 sales-recording modules in restaurants. Each box costs between $2,500 and $3,000 CAD.
According the Montreal Gazette, Quebec will reap $2.3 billion in the next few years that otherwise would have been lost to tax fraud.
Tax credits are another area where Ontario is losing money. Some rebates given to businesses to stimulate growth and jobs have been misused in the past, and could be costing the province dearly. Sousa plans to audit each one of these, and cut those that are being misused.
Meanwhile, the finance minister is also looking to freeze provincial property tax rates since revenue has been declining for almost a decade. Then, he may pin them to the inflation rate.
Sousa also is looking to partner with the federal government to co-ordinate a larger effort to stop companies moving money around to avoid taxes. He advocates a national strategy to crack down on cash-based businesses where employees aren’t receiving benefits and owners aren’t paying taxes.
Kathleen is a money junior reporter at International Business Times....