Organized Crime and Tax Fraud: the Tip of the Iceberg

Radio-Canada and the Globe and Mail have been hot on the story of organized crime abusing the Canadian tax system. Worrying and sadly, not a surprise. It clearly shows that Canada is not immune to sophisticated, multi-billion dollar global schemes that involve money laundering and hidden assets.


“We’ve been warning the government for years that they need to step up their capacity to fight mammoth abuses of the tax system,” says our Executive Director, Dennis Howlett.  “Instead they cut back auditors and programs and have spent years talking about a reorganization that no one understands. They hound ordinary Canadians – waitresses, carpenters and the self-employed.  Big-time tax abusers are laughing all the way to their offshore banks.”


The Canada Revenue Agency dismantled the Special Enforcement Program and laid off 500 audit staff who deal with international cases. This belies the government’s commitment to fighting crime and protecting Canadian’s interests.


According to CRA documents, the agency transferred the “audit work that was previously carried out by criminal investigators into the regular audit stream.”


Tax activists around the world have shown G8 leaders that trillions is going missing through some very shady deals that are nearly impossible to track. This is not an isolated example.


“It appears that two CRA workers did their job with diligence and commitment,” Howlett says. “It is time for their bosses to show leadership.”


If you want to read more about how organized crime plays the tax system all over the world we recommend a great report done by our colleague James Henry of the Tax Justice Network, Offshore Revisited.