Stronger enforcement needed to get wealthy to pay their share of taxes | Unions Yeah!

Stronger enforcement needed to get wealthy to pay their share of taxes

Ottawa (17 Nov. 2021) - More than 5years after the Panama Papers leak, CBC is reporting that there have yet to be any charges laid against the people behind a business that helped wealthy individuals avoid taxes. At the same time many provincial governments are claiming that they need to introduce austerity policies because they don’t have enough money.

The fact that someone revealed in the Panama Papers as “Canada's top offshore middleman” has not faced charges more than 5 years later confirms that there is a lot more that need to be done to ensure that the wealthy and large corporations pay their share of taxes. Instead of introducing austerity measures, governments need to be doing what is necessary to strengthen enforcement and close loopholes.

CRA report reveals company handled $338M flowing through tax havens

According to the most recent media report, the Canada Revenue Agency found that $338 million flowed through accounts in Canada that a company called Corporate House Group set up to help wealthy individuals move money in and out of tax havens. Corporate House Group set up shell companies to allow tax dodgers to move money without it being traced back to them.

Internationally Corporate House group operated as Bond and Company. The Panama Papers leak of records from a law firm that helped people move money to avoid taxes or for money laundering linked Bond and Company to over 1,000 shell companies. One example of how these shell companies were used is the CEO of one corporation routed most of his income through a shell company to avoid taxes.

Those responsible for setting up shell companies facing charges in the U.S.

The people who controlled Corporate House are facing both criminal and civil action in the United States as a result of an alleged fraud, but so far there have been no charges laid in Canada. According to the CBC, the people who controlled Corporate House have filed over 80 court challenges to try and prevent the CRA from auditing them. 

Wealthy individuals and large corporations shouldn’t be able to get away with tax avoidance

The information revealed in the Panama Papers leak means that the CRA likely has more information about the activities of those controlling the Corporate House Group than they have about others involved in tax evasion. Too often investigations into tax evasion are unsuccessful because the secrecy surrounding corporations registered in Canada means it is impossible to find out who really controls a company.

But in spite of the information the CRA has about the shell companies linked to Corporate House Group, more than 5 years after the Panama Papers the CRA has not even managed to audit those involved. That suggests that far more is needed to deal with tax evasion by the wealthy and large corporations. There is also the need to address issues like tax loopholes and other policies that allow the wealthy and large corporations to legally avoid paying their share.

Instead of austerity, ensure large corporations and the wealthy pay their share

When they introduce austerity policies, politicians will claim they have no alternative. They’re wrong. Instead of introducing austerity policies that will hurt low- and middle-income Canadians, they can fix the gaps in legislation and the lack of resources that are allowing the wealthy and large corporations to avoid paying their share in taxes.