Question Period Note: VOLUNTARY DISCLOSURES PROGRAM

How is the Voluntary Disclosure Program in the best interest of Canadians?

• The Canada Revenue Agency is committed to cracking down on offshore tax evasion and aggressive tax avoidance to ensure a tax system that is responsive and fair for all Canadians.

• The Government changed the Voluntary Disclosure Program (VDP) to: narrow the eligibility criteria to access the program.

• The changes were made to ensure the VDP operates fairly, supporting those Canadians that want to correct past errors, rather than those who have intentionally avoided their tax obligations.

• In fiscal 2018-2019, the VDP received more than 9,800 voluntary disclosures and generated more than $1B in previously unreported income.

In December 2017 following public consultations, the Agency announced the changes to the VDP, which became effective on March 1, 2018.

A number of tightening changes were made to the VDP, including:
• the creation of a new Limited Program, which will offer less generous relief to taxpayers who have intentionally avoided their tax obligations;
• requiring payment of the estimated taxes owing as a condition to qualify for the program – this payment was not required in the past;
• the cancellation of relief if it is subsequently discovered that a taxpayer’s application was not complete due to a misrepresentation; and
• the elimination of the process for taxpayers and authorized representatives to make disclosures on a no-names basis.

Context: 9,800 disclosures

The Agency reports voluntary disclosures based on the issue (e.g. income tax, GST, payroll), not based on taxpayer. A taxpayer may file a single disclosure that has an impact on multiple business lines. Therefore, this can result in multiple disclosures for reporting purposes. The 9,800 figure cited in the response lines reflects these multiple disclosures.

The Agency is developing a methodology to allow it to report disclosures based on the number of taxpayers that come forward.

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