An audit conducted by the Canada Border Services Agency (CBSA) found even though a report in 2017 suggested taking action against tax evasion, there are still millions of dollars in uncollected customs duties..The inspectors reported some importers avoided paying tariffs, which CBSA considered a serious problem..“Verifications have revealed significant non-compliance,” said Evaluation of the Duties Relief and Duty Drawback Programs..The CBSA said attempts at enforcement led to at least 32 major lawsuits, with companies challenging tax assessments worth $229 million..Under a Duties Relief Program dating from 1996, licensed importers transshipping goods through Canada can bring containers across the border without paying duties or surtaxes subject to audits..“Challenges were encountered,” said the report..“Over the past five years, there have been mounting legal challenges which are a direct result of the agency ramping up verification of Duties Relief Program supply managed goods participants as applications for relief involve very high monetary values,” wrote auditors..“These verifications have revealed significant non-compliance resulting in companies losing access to large sums of duties relief which has been challenged in court.”.Federal court records from 2022 show in one case, an Ontario company imported frozen chicken “using a duties relief license that did not belong to them.” .Taxes owed were $230,635..The review follows a 2017 report by the auditor general that found “insufficient controls to ensure duties were paid.” .Internal inspections confirmed importers misrepresented shipments “more than 20% of the time” to avoid payments worth at least $42 million a year, according to the audit Customs Duties..“We identified two reasons that may have allowed importers to be non-compliant,” wrote the auditor general..“First, the agency’s controls over imports were not working. And second, it appeared that some importers could circumvent the rules to their own advantage.”.“We found in 2015 importers brought quota-controlled goods into Canada without permits and without paying the right amount of customs duties,” wrote auditors..“These quota-controlled goods included dairy, chicken, turkey, beef and egg products for which importers would have paid $168 million in customs duties.”.According to Blacklock’s Reporter, tariffs represent a small share of federal tax revenue but are still worth billions..Of a total $413 billion annual revenue, about $5.2 billion are customs duties, according to Public Accounts..Larger sources of revenues are personal income tax (48%), corporate income tax (19%) and the Goods and Services Tax (11%)..Customs duties accounted for 49% of federal revenues at Confederation..Tariffs remained the largest source of federal revenue until the introduction of income tax in the First World War.
An audit conducted by the Canada Border Services Agency (CBSA) found even though a report in 2017 suggested taking action against tax evasion, there are still millions of dollars in uncollected customs duties..The inspectors reported some importers avoided paying tariffs, which CBSA considered a serious problem..“Verifications have revealed significant non-compliance,” said Evaluation of the Duties Relief and Duty Drawback Programs..The CBSA said attempts at enforcement led to at least 32 major lawsuits, with companies challenging tax assessments worth $229 million..Under a Duties Relief Program dating from 1996, licensed importers transshipping goods through Canada can bring containers across the border without paying duties or surtaxes subject to audits..“Challenges were encountered,” said the report..“Over the past five years, there have been mounting legal challenges which are a direct result of the agency ramping up verification of Duties Relief Program supply managed goods participants as applications for relief involve very high monetary values,” wrote auditors..“These verifications have revealed significant non-compliance resulting in companies losing access to large sums of duties relief which has been challenged in court.”.Federal court records from 2022 show in one case, an Ontario company imported frozen chicken “using a duties relief license that did not belong to them.” .Taxes owed were $230,635..The review follows a 2017 report by the auditor general that found “insufficient controls to ensure duties were paid.” .Internal inspections confirmed importers misrepresented shipments “more than 20% of the time” to avoid payments worth at least $42 million a year, according to the audit Customs Duties..“We identified two reasons that may have allowed importers to be non-compliant,” wrote the auditor general..“First, the agency’s controls over imports were not working. And second, it appeared that some importers could circumvent the rules to their own advantage.”.“We found in 2015 importers brought quota-controlled goods into Canada without permits and without paying the right amount of customs duties,” wrote auditors..“These quota-controlled goods included dairy, chicken, turkey, beef and egg products for which importers would have paid $168 million in customs duties.”.According to Blacklock’s Reporter, tariffs represent a small share of federal tax revenue but are still worth billions..Of a total $413 billion annual revenue, about $5.2 billion are customs duties, according to Public Accounts..Larger sources of revenues are personal income tax (48%), corporate income tax (19%) and the Goods and Services Tax (11%)..Customs duties accounted for 49% of federal revenues at Confederation..Tariffs remained the largest source of federal revenue until the introduction of income tax in the First World War.
