Tax time is like eating tinfoil ... painful |
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Ottawa - Tuesday, April 30, 2002 - by: Walter Robinson, Federal Director, Canadian Taxpayers Federation | |
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Over 1.8 million Canadians will file over the Internet using Netfile, up from 1.4 million in 2001. If you’re expecting a refund, it will (or was) be directly deposited into your account in about ten days as opposed to the traditional six-week wait if your cheque is coming in the mail. |
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The average refund this year, according to the Canada Customs and Revenue Agency (CCRA), is $1,120. But this isn’t a windfall, it simply means you paid too much tax in the first place. Seeking better tax planning and financial advice now will ensure that you keep this money for yourself in the future and put it to more productive and immediate use. |
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Taxpayers should also know that, even if they owe the taxman money, they should file before the April 30th deadline. If you owe money, interest at the rate of 6%, compounded daily kicks in on May 1st. If you fail to file by April 30th, it gets worse. Not only will you be slapped with a 5% late filing fee, a 1% charge on your balance owing will also accumulate monthly to a maximum of 12%. If you wait to file your 2001 tax return until April 2003, you will owe 17% interest on top of taxes payable. And unlike interest you pay on a loan, this interest is not tax deductible. |
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Tax time also prompts many to ask: how much am I really paying, what value do I get for my tax dollar and why can’t Ottawa and the provinces do better with less? Valid questions indeed. According to the Fraser Institute, your family pays 49.6% of its income in taxes and fees to all levels of government. Ottawa collects the lion’s share at 65%, the provinces suck up another 30%, and city hall is left with the last 5%. |
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As for the value question, this depends on your view of the role of government. The Canadian Taxpayers Federation believes, there is a great deal of wasteful spending. Right off the top $4 billion each year of Ottawa’s tax haul is earmarked for grants, loans and subsidies to Canadian businesses, more commonly referred to as corporate welfare. |
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One final thought, our American friends celebrated tax freedom day (the day they start working for themselves) this past weekend. For us, it’s still two months away … oh yeah, happy tax deadline day. |
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Walter Robinson Federal Director |
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