What is Canada Revenue Agency?
The running of a country’s government depends on the effective tax collection and other revenues. The responsibility of tax collection and monitoring the system involved for Canada is entrusted with the Canada Revenue Agency. It is a federal agency that lays down the laws and regulation for tax collection, international trade legislation and other government schemes associated with the tax system.
You can find the website of the Agency at cra-arc.gc.ca
When was the Canada Revenue Agency Instituted?
The Canada Revenue Agency was previously known by the name Canada Customs and Revenue Agency. It was first initiated in the year 1999. It handled both the tax system and the customs responsibilities. Under the Federal Identity Program which worked towards building an image for the federal government split the agency. One organization looked after the revenue and tax collection namely Canada Revenue Agency or Revenue Canada. The customs was governed by Public Safety Canada.
How are Taxes Administered?
The Canada Revenue Agency is responsible for administering all kinds of personal and individual taxes in the nation. The Income tax for the Quebec province alone is not in its jurisdiction. The Agency is also responsible for collection of corporate taxes for almost all provinces with the exception of Quebec and Alberta. The Ontario provincial government is partially involved in the collection of taxes.
The Canadian federal government implements Goods and Services Tax on all commodities and services offered. However Quebec has its own tax system for commodities and services. Some provinces in Canada follow a Harmonized Sales Tax which is an amalgamation of Goods and Services Tax and Provincial Sales Tax. This tax system is also administered by the Canada Revenue Agency. The Ontario provincial government also has plans to switch to the harmonized system and the agency would most probably be given the responsibility.
What is the Scientific Research and Experimental Development Tax Credit Program?
This is one of the flagship schemes of Canada Revenue Agency is the Scientific Research and Experimental Development Tax Credit Program. The scheme is centred on providing tax incentives to firms that are involved in applied research and experimental development inside the country. The scheme is administered by Canada Revenue Agency and the scheme is said to have provided credits to businesses to the tune of nearly $4 billion. The scheme was formulated mainly to encourage research and development in small and mid-size companies so that better products
and services are offered. The various activities that are covered under this scheme are Experimental development, applied research, Basic research and Support work. The credit offered depends on the provinces as various provinces give varying levels of credit. Quebec province even offers a credit of 37.5 per cent. Some provinces however do not offer much credits under this scheme.
Criticisms against Canada Revenue Agency
Even though the agency performs its duty throughout the country, it faces a lot of allegations against it. It has been charged with inconsistent tax breaks to individuals and businesses. There has been a rise in number of other entities acting as middlemen dealing with the tax system. There have also been reports of mistakes on the part of the agency leading to huge losses for the tax payer.