Pub Date : 2023-04-01DOI: 10.32721/ctj.2023.71.1.sym.li
Jinyan Li
This paper provides a high-level overview of the pillar two global minimum tax in terms of its policy objectives, technical design, and implications for Canada. After teasing out some significant known and unknown challenges, the paper offers some thoughts on whether and, if so, how and when Canada should proceed with implementation.
{"title":"Introducing a Global Minimum Tax (Pillar Two) in Canada: Some Knowns and Unknowns","authors":"Jinyan Li","doi":"10.32721/ctj.2023.71.1.sym.li","DOIUrl":"https://doi.org/10.32721/ctj.2023.71.1.sym.li","url":null,"abstract":"This paper provides a high-level overview of the pillar two global minimum tax in terms of its policy objectives, technical design, and implications for Canada. After teasing out some significant known and unknown challenges, the paper offers some thoughts on whether and, if so, how and when Canada should proceed with implementation.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":"59 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133082428","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-02-01DOI: 10.32721/ctj.2022.70.supp.mansour
Mario Mansour, Eric M. Zolt
With the exception of a few North African countries, personal income taxes (PITs) play little or no role in the Middle East and North Africa (MENA), often yielding less than 2 percent of gross domestic product (GDP) in revenue. This paper examines how PITs have evolved in recent decades, and what they might look like in the next 20 years. Throughout the region, top marginal tax rates on labour and business income of individuals have declined substantially, a trend that mirrors reductions in advanced and developing economies. Taxation of passive capital income has changed very little, and the revenue contribution from this source remains low throughout the region, averaging less than 1 percent of GDP and concentrated in oil-importing non-fragile states. Social security contributions (SSCs) have increased in importance in nearly all MENA countries, and some countries have introduced additional payroll taxes and levies. The combination of reduced marginal tax rates, light taxation of income from capital and business activities, and increases in SSCs has resulted in income tax systems that create disincentives to work and incentives for informality, and contribute little to government revenue and income redistribution. Given differences in economic and political structures, demographics, and starting points, the path to PIT and SSC reforms will vary across the region. Countries with relatively mature PIT/SSC systems, where revenue performance has improved in the past two decades, will increasingly need to balance revenue and equity objectives against efficiency objectives (in particular, labour market incentives and informality). Countries without a PIT will have to weigh whether a consumption tax/SSC system that mimics a flat tax on labour income is sufficient to diversify revenue away from oil, and whether to adopt PITs to address rising income and wealth inequality. Finally, fragile states, which face more political volatility and have weaker fiscal institutions than non-fragile states, will have to focus on simplicity of tax design and collection to be able to raise revenue from PITs.
{"title":"Personal Income Taxes in the Middle East and North Africa: Prospects and Possibilities","authors":"Mario Mansour, Eric M. Zolt","doi":"10.32721/ctj.2022.70.supp.mansour","DOIUrl":"https://doi.org/10.32721/ctj.2022.70.supp.mansour","url":null,"abstract":"With the exception of a few North African countries, personal income taxes (PITs) play little or no role in the Middle East and North Africa (MENA), often yielding less than 2 percent of gross domestic product (GDP) in revenue. This paper examines how PITs have evolved in recent decades, and what they might look like in the next 20 years. Throughout the region, top marginal tax rates on labour and business income of individuals have declined substantially, a trend that mirrors reductions in advanced and developing economies. Taxation of passive capital income has changed very little, and the revenue contribution from this source remains low throughout the region, averaging less than 1 percent of GDP and concentrated in oil-importing non-fragile states. Social security contributions (SSCs) have increased in importance in nearly all MENA countries, and some countries have introduced additional payroll taxes and levies. The combination of reduced marginal tax rates, light taxation of income from capital and business activities, and increases in SSCs has resulted in income tax systems that create disincentives to work and incentives for informality, and contribute little to government revenue and income redistribution. Given differences in economic and political structures, demographics, and starting points, the path to PIT and SSC reforms will vary across the region. Countries with relatively mature PIT/SSC systems, where revenue performance has improved in the past two decades, will increasingly need to balance revenue and equity objectives against efficiency objectives (in particular, labour market incentives and informality). Countries without a PIT will have to weigh whether a consumption tax/SSC system that mimics a flat tax on labour income is sufficient to diversify revenue away from oil, and whether to adopt PITs to address rising income and wealth inequality. Finally, fragile states, which face more political volatility and have weaker fiscal institutions than non-fragile states, will have to focus on simplicity of tax design and collection to be able to raise revenue from PITs.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134532998","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-11-01DOI: 10.32721/ctj.2022.70.3.pf.neill.snoddon
Christine Neill, Tracy R. Snoddon
Stanley Surrey and others have highlighted tax expenditures as being hidden forms of spending that can evade the type of analysis and scrutiny applied to direct spending programs, allowing inefficient and inequitable programs to persist. But there is only limited empirical evidence on differences in the persistence of similar programs in a tax measure compared to a direct spending form. The conversion of Ontario's education and tuition tax expenditures into a direct form of spending via the existing student aid program provides an interesting case study. As discussed in this article, although the tax credits had never been the subject of a value-for-money audit, the student aid program was reviewed in 2018 shortly after the changeover, to hearty criticism of its distributional effects despite its being less regressive than the tax credit versions. This led to substantial cuts in the program, in line with views on the persistence of tax expenditures.
{"title":"Policy Forum: Tax Expenditures—Lessons from the Elimination of Ontario's Tuition and Education Tax Credits","authors":"Christine Neill, Tracy R. Snoddon","doi":"10.32721/ctj.2022.70.3.pf.neill.snoddon","DOIUrl":"https://doi.org/10.32721/ctj.2022.70.3.pf.neill.snoddon","url":null,"abstract":"Stanley Surrey and others have highlighted tax expenditures as being hidden forms of spending that can evade the type of analysis and scrutiny applied to direct spending programs, allowing inefficient and inequitable programs to persist. But there is only limited empirical evidence on differences in the persistence of similar programs in a tax measure compared to a direct spending form. The conversion of Ontario's education and tuition tax expenditures into a direct form of spending via the existing student aid program provides an interesting case study. As discussed in this article, although the tax credits had never been the subject of a value-for-money audit, the student aid program was reviewed in 2018 shortly after the changeover, to hearty criticism of its distributional effects despite its being less regressive than the tax credit versions. This led to substantial cuts in the program, in line with views on the persistence of tax expenditures.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124935417","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-11-01DOI: 10.32721/ctj.2022.70.3.fon
Ayaka Behro, M. Smart
In this article, Ayaka Behro and Michael Smart explore the impact of COVID-19 on provincial government finances. While spending rose in all provinces in the 2020-21 fiscal year, so did revenues in many provinces, cushioning the impact on deficits. While grants and income tax revenues rose in many provinces, largely owing to federal policies, consumption tax and natural resource revenues fell sharply. Comparing provinces, higher COVID-19 caseloads were associated with higher health spending and lower consumption tax revenues. These findings suggest that COVID-19 has had a more damaging impact on provincial finances than initial forecasts had suggested.
{"title":"Finances of the Nation: The Impact of COVID-19 on Provincial and Local Government Finances","authors":"Ayaka Behro, M. Smart","doi":"10.32721/ctj.2022.70.3.fon","DOIUrl":"https://doi.org/10.32721/ctj.2022.70.3.fon","url":null,"abstract":"In this article, Ayaka Behro and Michael Smart explore the impact of COVID-19 on provincial government finances. While spending rose in all provinces in the 2020-21 fiscal year, so did revenues in many provinces, cushioning the impact on deficits. While grants and income tax revenues rose in many provinces, largely owing to federal policies, consumption tax and natural resource revenues fell sharply. Comparing provinces, higher COVID-19 caseloads were associated with higher health spending and lower consumption tax revenues. These findings suggest that COVID-19 has had a more damaging impact on provincial finances than initial forecasts had suggested.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129500171","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-11-01DOI: 10.32721/ctj.2022.70.3.pf.neill.schwartz
Christine Neill, S. Schwartz
Since the world's first tax-system-based income-contingent repayment system for the repayment of student loans was introduced in Australia in 1989, there have been suggestions that Canada should adopt a similar system. But there has been little discussion of the practicalities involved in introducing a new system where there is joint federal and provincial involvement and where the new system would replace a pre-existing and generous, if incomplete, form of income-contingent repayment (ICR). Joint federal and provincial involvement is a problem unique to Canada, and replacement of the existing system becomes problematic when that system is more generous than the proposed alternative. In this article, we identify five key stumbling blocks that make us skeptical about the prospects of switching to tax-system-based repayment of student loans in Canada: the need for intergovernmental cooperation; additional responsibilities for the tax authorities; potential costs to employers from further complicating the withholding system; challenges if the new system were to try to fit the current program parameters into the tax system efficiently; and the political challenge of gaining student support. While there are certainly benefits to administering ICR through the tax system, these need to be weighed against the costs.
{"title":"Policy Forum: Five Reasons To Be Skeptical About the Repayment of Canada's Student Loans Through the Tax System","authors":"Christine Neill, S. Schwartz","doi":"10.32721/ctj.2022.70.3.pf.neill.schwartz","DOIUrl":"https://doi.org/10.32721/ctj.2022.70.3.pf.neill.schwartz","url":null,"abstract":"Since the world's first tax-system-based income-contingent repayment system for the repayment of student loans was introduced in Australia in 1989, there have been suggestions that Canada should adopt a similar system. But there has been little discussion of the practicalities involved in introducing a new system where there is joint federal and provincial involvement and where the new system would replace a pre-existing and generous, if incomplete, form of income-contingent repayment (ICR). Joint federal and provincial involvement is a problem unique to Canada, and replacement of the existing system becomes problematic when that system is more generous than the proposed alternative. In this article, we identify five key stumbling blocks that make us skeptical about the prospects of switching to tax-system-based repayment of student loans in Canada: the need for intergovernmental cooperation; additional responsibilities for the tax authorities; potential costs to employers from further complicating the withholding system; challenges if the new system were to try to fit the current program parameters into the tax system efficiently; and the political challenge of gaining student support. While there are certainly benefits to administering ICR through the tax system, these need to be weighed against the costs.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":"52 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130650348","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-11-01DOI: 10.32721/ctj.2022.70.3.pf.robson
Jennifer Robson
Since the Canada learning bond (CLB) launched in 2005, 1.6 million children have ever received a CLB payment; these are from among the 3.8 million children who have ever been officially eligible. Starting in 2022, hundreds of thousands of CLB-eligible children will become adults able to make an independent claim for a retroactive benefit payment. While these adults will have formed their own core fiscal unit, eligible for other transfers tied to their own taxfiling, their access to the CLB will be determined by a core fiscal unit that they have left. This arrangement pushes at the boundaries of Canada's tax and transfer system, which generally assumes coordination within a core fiscal unit, where a fiscal unit refers to family grouping used by the Canada Revenue Agency to asses taxes and transfers. Extant data suggest that taxfiling may be an administrative obstacle for a non-trivial share of children and young adults, but it has not yet received much attention from policy makers. In this article, I discuss options for policy change that might improve access to the CLB by reducing reliance on annual filing to assess income for both adult claimants and current minors eligible for the program.
{"title":"Policy Forum: Does Non-Filing Hinder Access to the Canada Learning Bond for Low-Income Families?","authors":"Jennifer Robson","doi":"10.32721/ctj.2022.70.3.pf.robson","DOIUrl":"https://doi.org/10.32721/ctj.2022.70.3.pf.robson","url":null,"abstract":"Since the Canada learning bond (CLB) launched in 2005, 1.6 million children have ever received a CLB payment; these are from among the 3.8 million children who have ever been officially eligible. Starting in 2022, hundreds of thousands of CLB-eligible children will become adults able to make an independent claim for a retroactive benefit payment. While these adults will have formed their own core fiscal unit, eligible for other transfers tied to their own taxfiling, their access to the CLB will be determined by a core fiscal unit that they have left. This arrangement pushes at the boundaries of Canada's tax and transfer system, which generally assumes coordination within a core fiscal unit, where a fiscal unit refers to family grouping used by the Canada Revenue Agency to asses taxes and transfers. Extant data suggest that taxfiling may be an administrative obstacle for a non-trivial share of children and young adults, but it has not yet received much attention from policy makers. In this article, I discuss options for policy change that might improve access to the CLB by reducing reliance on annual filing to assess income for both adult claimants and current minors eligible for the program.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":"70 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130676573","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-11-01DOI: 10.32721/ctj.2022.70.3.pfp
Patricia McDougall
Le testament est un élément crucial d'un plan successoral. Le conseiller fiscal est souvent amené à examiner le testament d'un client dans le cadre du processus de planification de sa succession. Pour procéder à cet examen en toute confiance et être en mesure de commenter les répercussions fiscales d'un testament, un conseiller fiscal doit connaître les dispositions standard de ce document. Le présent article vise à commenter la structure générale d'un testament standard et les aspects fiscaux dont un conseiller fiscal sans formation juridique doit tenir compte et qu'il doit aborder dans son examen de ce document.
{"title":"Planification fiscale personnelle : Aspects fiscaux dont un non-juriste doit tenir compte dans l'examen d'un testament","authors":"Patricia McDougall","doi":"10.32721/ctj.2022.70.3.pfp","DOIUrl":"https://doi.org/10.32721/ctj.2022.70.3.pfp","url":null,"abstract":"Le testament est un élément crucial d'un plan successoral. Le conseiller fiscal est souvent amené à examiner le testament d'un client dans le cadre du processus de planification de sa succession. Pour procéder à cet examen en toute confiance et être en mesure de commenter les répercussions fiscales d'un testament, un conseiller fiscal doit connaître les dispositions standard de ce document. Le présent article vise à commenter la structure générale d'un testament standard et les aspects fiscaux dont un conseiller fiscal sans formation juridique doit tenir compte et qu'il doit aborder dans son examen de ce document.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125347605","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-11-01DOI: 10.32721/ctj.2022.70.3.taylor
Roger Taylor, Marie-Claude Marcil
In 1998, the Supreme Court of Canada issued its decision in Duha Printers. This was the first case dealing with the concept of de jure control of a corporation that the court had considered since its decision in Imperial General Properties in 1985. In Duha Printers, the court effectively restored the Buckerfield's test of control and set out a schematic basis for determining the person (if any) that controls a corporation at a particular time, and the evidentiary basis on which that person could be legally deprived of such control. The court's reasons for judgment raise a number of issues in respect of the concept of de jure control, including the scope of application of the decision, the continuing authority of the Supreme Court's two decisions previous to Duha Printers that appeared to have strayed from the Buckerfield's test of control, the limitation of the category of agreements that may be relevant to the control question, and the scope of and rationale for exceptions to that limitation. This article explores a number of de jure control issues decided or commented on by the court, and raised by the reasons for judgment, in Duha Printers.
1998年，加拿大最高法院对杜哈印刷公司一案作出裁决。这是法院自1985年对Imperial General Properties一案作出判决以来，审理的第一起涉及公司法定控制权概念的案件。在Duha Printers一案中，法院有效地恢复了巴克菲尔德的控制权测试，并为确定在特定时间控制公司的人(如果有的话)以及该人可以在法律上被剥夺这种控制权的证据基础，制定了一个概要基础。法院的判决理由提出了有关法律上控制概念的若干问题，包括决定的适用范围、最高法院在Duha Printers案之前似乎偏离了巴克菲尔德控制标准的两项决定的持续权威、可能与控制问题有关的协议类别的限制、以及该限制的例外范围和理由。本文探讨了法院在Duha Printers一案中决定或评论的一些法律上的控制问题，以及由判决原因引起的问题。
{"title":"Duha Printers Revisited: Issues Regarding Corporate Control","authors":"Roger Taylor, Marie-Claude Marcil","doi":"10.32721/ctj.2022.70.3.taylor","DOIUrl":"https://doi.org/10.32721/ctj.2022.70.3.taylor","url":null,"abstract":"In 1998, the Supreme Court of Canada issued its decision in Duha Printers. This was the first case dealing with the concept of de jure control of a corporation that the court had considered since its decision in Imperial General Properties in 1985. In Duha Printers, the court effectively restored the Buckerfield's test of control and set out a schematic basis for determining the person (if any) that controls a corporation at a particular time, and the evidentiary basis on which that person could be legally deprived of such control. The court's reasons for judgment raise a number of issues in respect of the concept of de jure control, including the scope of application of the decision, the continuing authority of the Supreme Court's two decisions previous to Duha Printers that appeared to have strayed from the Buckerfield's test of control, the limitation of the category of agreements that may be relevant to the control question, and the scope of and rationale for exceptions to that limitation. This article explores a number of de jure control issues decided or commented on by the court, and raised by the reasons for judgment, in Duha Printers.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":"44 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130254165","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-11-01DOI: 10.32721/ctj.2022.70.3.ptp
Patricia McDougall
A will is a critical part of an estate plan. A tax adviser must frequently review a client's will as part of the estate-planning process. To review a will confidently, the tax adviser should have an understanding of the standard provisions of a will and thus be able to comment on the tax implications of the document. The objective of this article is to provide comments on the broad structure of a standard will and the tax issues to be considered and addressed as part of a will review, from the perspective of a tax adviser without legal training.
{"title":"Personal Tax Planning: Reviewing a Will—Tax Considerations for Non-Legal Advisers","authors":"Patricia McDougall","doi":"10.32721/ctj.2022.70.3.ptp","DOIUrl":"https://doi.org/10.32721/ctj.2022.70.3.ptp","url":null,"abstract":"A will is a critical part of an estate plan. A tax adviser must frequently review a client's will as part of the estate-planning process. To review a will confidently, the tax adviser should have an understanding of the standard provisions of a will and thus be able to comment on the tax implications of the document. The objective of this article is to provide comments on the broad structure of a standard will and the tax issues to be considered and addressed as part of a will review, from the perspective of a tax adviser without legal training.","PeriodicalId":375948,"journal":{"name":"Canadian Tax Journal/Revue fiscale canadienne","volume":"2020 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122505563","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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