Allan Lanthier, the former chairperson of the Canadian Tax Foundation, said that Canada requires major changes in their tax code to achieve competitiveness in businesses to attract best business investments.
The Senate Finance Committee recommended withdrawal of proposed small-business tax changes and review the system in last December.
As most of the small business proposals have been dumped, the government is opposing the review of the present tax regime. There are problems in the present regime.
Though the stated tax rate for public corporations in Canada is 27 percent, very few pay taxes at this rate. Some resource companies incur heavy development and exploration expenses which they are not able to deduct due to insufficient income.
Many multinational corporations operating in the country are avoiding tax using conduit companies. Canada has not taken any action to limit the conduit companies which help in tax avoidance.
The tax code of the country is a real fiscal calamity and needs good repair. The last time the government reviewed the tax was in the1960s, but ad-hoc changes were made regularly.
Now a thorough review is needed. Hence, the government should appoint a panel of experts for the purpose. The panel needs to recommend the changes aiding in attracting investments and improving competitiveness.
