Anonymity and untraceability are two key ingredients when a tax dodger is looking to set up a scheme. Often this goes on in "traditional"tax havens. But setting up an anonymous shell company in Canada is easy. Tax dodgers know it. And it has contributed to a growing problem here at home. In a recent report, Transparency International described our current system as weak - particularly compared to Great Britain.
Recently, Canadians for Tax Fairness joined several other organizations to raise the issue with provincial premiers. In an open letter, the groups explain the need for a public registry of the beneficial owners of companies. "A centralized public registry of beneficial owners is an important step to ensure Canada fulfills its G7 and G20 commitments and supports global efforts to fight tax evasion and money laundering," the letter states. Currently, the systems and records vary from province to province.
C4TF estimates that Canada loses more than $8Billion a year from tax haven schemes. "The problem gets larger every year. And it hurts both federal and provincial revenues and impacts health care, education, public safety, and more" says C4TF Executive Director, Dennis Howlett. "The frustating thing is that the solution is not expensive. A centralized, public registry of the legal and beneficial owners of corporations and trust will allow ill-gotten gains to be more easily traced, making it more difficult and less attractive for people to benefit from the proceeds of crime."
It will also make it easier for financial institutions, securities commissions and law enforcement officials to ascertain information about the legal and effective owners of companies and trusts. Currently the system is time-consuming, costly and unwieldy. "Tax dodgers count on that degree of difficulty and hope it deters anyone from tracking them down," says Howlett.
Howlett says that creating a public registry system would be a necessary step to uphold both its global commitments and its responsibility to create a fair tax system here at home.
You can read the open letter to the premiers which is attached below.