The federal government says it will soon introduce a free, automatic tax filing system for simple returns — a policy change meant to provide government benefits to qualified people who don’t collect them now because they skip filing their taxes.
The promise — a one-line commitment buried in the 6,783-word speech from the throne — could help hundreds of thousands of low- and fixed-income Canadians access benefits that are only paid to people who file tax returns.
By law, and in most cases, only people who owe taxes are required to file a return each year with the Canada Revenue Agency (CRA).
Many people — notably those on government assistance — don’t expect to owe the federal government anything, so they seldom file.
Under the proposed changes, the CRA itself would draw up the paperwork for such simple returns each year — using data they already have on hand about individuals’ income — to eliminate a bureaucratic burden that stands in the way of financial support.
Experts in tax policy have long said that the CRA already has enough personal information to automatically fill out tax returns for many infrequent filers. Much of the needed figures are electronically transmitted to the agency by employers and government agencies alike.
Thirty-six countries, including Germany, Japan and the United Kingdom, already permit return-free filing for some taxpayers.