Canada’s overly complex tax system costs consumers, businesses and the economy more than just tax bills. The time and money spent to comply with our tax system adds up to a significant hidden cost, and today’s fragile economic recovery makes it a good time to open the dialogue on tax simplification, says a new study commissioned by the Certified General Accountants Association of Canada (CGA-Canada).

The Need for Tax Simplification – A Challenge and an Opportunity highlights key issues around tax simplification. The Association aims to use the study to build awareness and promote discussion among interested stakeholders as a meaningful contribution to an important subject of public policy.

“Canada’s tax system is among the most complex in the world, which hurts our economy and adversely affects small and medium size enterprises (SMEs) and individual taxpayers,” says Anthony Ariganello, President and CEO, CGA-Canada. “We believe tax simplification is good for taxpayers, businesses, governments and our economy. Our members – CGAs in business, industry and private practice – overwhelmingly tell us it’s the top issue they want governments to tackle. We’re looking beyond the numbers to see what’s in the public’s best interest.”

The study considers both the challenge of a potentially high political cost of making difficult tax reform decisions, and the opportunity to yield substantial savings and contribute to a sustainable fiscal structure. “In our view, the benefits coming from a policy of reducing the tax burden on Canadians will be much greater with tax simplification and reform,” Ariganello continues, “but we need more public debate on the issue.”

The study points out that there have been few attempts to simplify the tax system since its creation in 1917. It considers the nature and reasons for tax complexity and discusses the need for a review of both the personal and corporate income tax systems. With increasing fiscal pressures from demographic trends, and the threat of Canada lagging behind trading partners like the UK, Australia and the US on tax modernization, the new study proposes that it is the right time to set a clear course to simplify our tax system.

“Now’s the opportunity for robust debate and for the federal government to look at how Canada’s tax regime can be simplified and streamlined to help build a strong, competitive 21^st century economy,” comments Ariganello.

Tax simplification is a key pillar of CGA-Canada’s advocacy program.