Tax Avoidence

Author: Cecelia Lee

April 2016 

The Panama Papers are in the news recently. Apparently people, and companies, with big money are avoiding paying taxes in their home countries by sending a bunch of it to offshore tax havens. It is not only an issue for other countries, we have our own gang of people who hide money that should be taxed. Beggaring the public purse in this way is a huge problem for the ability of our government to fund the necessary programs and infrastructure. However these big money folks comprise only one of the groups avoiding their tax responsibilities.

Another tax avoidance group - the underground economy - keeps money out of the public as well. I would actually call this group the underground tax avoidance economy. It is prevalent in the trades groups.

Recently I have had a house-painter, a roofer and an electrician ask if I were paying for their services in cash. One caught me off guard and I wrote a cheque in his father’s name. I won’t do that again. The electrician was fine and wrote out an invoice and I paid by cheque to the company. The roofer, when I asked for an invoice said they don’t give invoices for small jobs. This cost me five hundred dollars. He wanted the cheque made out to a person’s name. I assume his boss. I said no, I’ll make it out to the company and I want an invoice. That was three weeks ago. Someone did call and get an email address to send one through the internet, but it hasn’t appeared yet. On top of that I gave the guy a calculator to figure out what the tax was while I wrote the cheque. My suspicion, with no invoice is that he is most likely pocketing the lawful tax money that should be going into our public purse. In this instance someone is not paying the HST that I paid; nor is he paying income tax on the money he has collected. A double scam. I won't use his services again.

In fact the roofer told me that some customers will only pay cash even if it is $15,000.00.

This is one gigantic scam on the public good and I have no idea how large it really is (though I suspect it involves a large aggregate sum) or how to fix it, but a lot of money is going into pockets that should be part of our tax money. This is different from tax havens as evidenced by the Panama Papers because of the amount of money involved that the individuals and company conceal, but, the principle is the same, we are all poorer as a society because of the underground economy.

If this issue could be faced up to and resolved, our public coffers would be richer and then our governments could properly address the infrastructure needs and other pressing issues like the people in need of assistance and the money owed to Indigenous people.