The global blow-out from the Panama Papers should signal to the federal government that it is time to prosecute KPMG Canada with facilitating tax evasion for its Isle of Man scheme.
It has been widely reported that the Canada Revenue Agency made a secret amnesty deal with at least 15 multi-millionaires who got caught with evasion. But it has not charged KPMG for its role.
“Super-wealthy clients could not be sending their money offshore with such ease if it weren't for the global wealth management industry," says Dennis Howlett, executive director of Canadians for Tax Fairness. "Governments need to send a message that kind of aggressive tax planning will not be tolerated." Instead, says Howlett, the government continues to engage with KPMG, which gets millions in federal contracts each year.
"That signals that is that it is business as usual no matter what they do," says Howlett. "But Canadians have had enough."
Worldwide, KPMG has been prosecuted before under similar circumstances. In 2008, two former KPMG executives were convicted in a fraudulent tax-shelter scheme that also resulted in the company paying nearly $500 million in penalties. You can read more about the case in this recent article in the online magazine Advisor.