TEI's letter to Canadian Department of Finance on paperwork burden reduction.

• Position: Tax Executives Institute

On May 5, 2008, TEI President Robert J. McDonough submitted a letter to the Canadian Department of Finance recommending paperwork burden reductions for businesses. TEI's recommendations were prepared under the aegis of its Canadian Income and Commodity Tax Committees, whose chairs are David M. Penney of General Motors of Canada Limited and Phil W. Riley of ArcelorMittal Dofasco, Inc., respectively.

In response to the invitation extended in your letter of March 12, 2008, to David M. Penney, 2007-2008 Chair of Tax Executives Institute's Canadian Income Tax Committee, I am pleased to submit the recommendations of Tax Executives Institute for reducing the paperwork burden imposed on businesses.

Background

Tax Executives Institute is the preeminent international association of business tax executives. The Institute's 7,300 professionals manage the tax affairs of 3,200 of the leading companies in North America, Europe, and Asia. Canadians constitute 10 percent of TEI's membership, with our Canadian members belonging to chapters in Calgary, Montreal, Toronto, and Vancouver, which together make up one of our nine geographic regions, and must contend daily with the planning and compliance aspects of Canada's business tax laws. Many of our non-Canadian members (including those in Europe and Asia) work for companies with substantial activities in Canada. The comments set forth in this letter reflect the views of the Institute as a whole, but more particularly those of our Canadian constituency.

Discussion

In the November 2006 Advantage Canada economic plan, the Canadian government committed to reducing the paperwork burden of businesses by 20 percent. As part of the initiative, Canada Revenue Agency (CRA) and the Department of Finance have catalogued the requirements and obligations imposed by the tax system, including the Income Tax Act and the Excise Tax Act, in order to establish a baseline for measuring potential paperwork reductions.

The large corporations for which TEI members work are affected by nearly all aspects of the tax system, from filing and payment of corporate income and excise taxes, to audits and appeals of those liabilities, to withholding and reporting of employee tax obligations as well as myriad other information reporting obligations. Accordingly, the recommendations for paperwork reduction set forth in the Appendix to this letter encompass a broad range of reporting requirements under both Acts. As important, the Paperwork Burden Reduction effort should be considered an ongoing initiative. Even though the government must soon begin implementing reductions in order to meet its target of a 20-percent reduction by November 30, 2008, we recommend that the Department of Finance designate an office to continue to accept, review, and implement paperwork burden reduction recommendations throughout its review process and even beyond the November date.

TEI appreciates that the government must assess the effect of the recommended paperwork and reporting requirement reductions on the integrity and efficiency of the tax system. We believe our recommendations will be helpful in streamlining the administration of both Acts for the benefit of taxpayers and the government alike and commend them for your consideration. We shall be pleased to meet with the Department or CRA or respond to any questions you may have about our recommendations.

TEI's recommendations were prepared under the aegis of the Institute's Canadian Income Tax and Commodity Tax Committees, whose chairs are David M. Penney and Phil W. Riley, respectively. If you should have any questions about the recommendations, please do not hesitate to call Mr. Penney at 905.644.3122 (or david.penney@gm.com), Mr. Riley at 905.548.4475 (or phil.riley@ arcelormittal.com) or Munir A. Suleman, TEI's Vice President for Canadian Affairs, at 416.866.4698 (or munir.suleman@scotiabank.com).

Appendix

Recommendations for Income Tax Paperwork Burden Reductions

1. Information Returns

   * Eliminate the requirement to issue T3s (Statement of Trust Income Allocations and Designations)...