TORONTO, Feb. 11 /CNW/ - Canada's Chartered Accountants believe that the
House of Commons Standing Committee on Finance should have called on the
federal government to adopt a simplified corporate tax system in its
recommendations for the 2008 budget.
"The corporate tax reductions committed to in last fall's economic
statement are very encouraging, but the government must do more," said Kevin
Dancey, FCA, President and CEO of the Canadian Institute of Chartered
Accountants (CICA). "With countries the world over aggressively reducing
corporate taxes, Canadian business taxes must be reduced further and faster
than outlined in the government's plans. The general corporate rate must be
reduced to the small business level as quickly as possible."
A single corporate tax rate would bring much-needed simplification to the
tax system by eliminating the rules currently needed to differentiate between
large and small business income. In doing so, it would lower compliance costs
and further enhance business prosperity.
The CICA is continuing its calls for an accelerated pace of debt
reduction, something not supported in the Finance Committee recommendations.
Even with the sustained reductions of recent years, the level of debt remains
high - roughly $14,000 is owed for every Canadian - and interest payments take
away 14 cents from each dollar of revenue.
"Debt reduction remains vital to enhancing prosperity and providing the
fiscal flexibility to further reduce taxes," said Dancey. The CICA is calling
on the government to increase yearly debt payments to $5 billion, and to aim
for a debt-to-GDP ratio of 20 per cent by or before the 2013/2014 fiscal year.
The CICA is encouraged by the Finance Committee's support for a program
to encourage remaining provinces to move to a harmonized sales tax, and urges
the government to provide for a harmonization incentive in its upcoming
Canada's CAs are also pleased that the Committee supports an extension of
the accelerated capital cost allowance for manufacturing and processing
equipment first introduced in the 2007 budget, a move that would improve
Canada's business tax competitiveness.
"The right mix of lower corporate taxes, sales tax harmonization and CCA
rates that are in line with economic depreciation would provide a powerful
incentive for businesses to grow right here in Canada, and offer much needed
relief to the industries hardest hit by a high Canadian dollar," said Dancey.
The Canadian Institute of Chartered Accountants (CICA), together with the
provincial, territorial and Bermuda Institutes/Ordre of Chartered Accountants,
represents a membership of approximately 72,000 CAs and 10,000 students in
Canada and Bermuda. The CICA conducts research into current business issues
and supports the setting of accounting, auditing and assurance standards for
business, not-for-profit organizations and government. It issues guidance on
control and governance, publishes professional literature, develops continuing
education programs and represents the CA profession nationally and
internationally. CICA is a founding member of the International Federation of
Accountants (IFAC) and the Global Accounting Alliance (GAA).
For further information:
For further information: Tobin Lambie, Media Manager, CICA, (416)