Buckle Up for a Complicated Tax Season
The 2020 tax year will undoubtedly be one of the most complicated in history, with tax preparers “bracing for a tsunami of complex returns and taxpayer anxiety.”
The Canadian tax system is already, to quote the Chartered Professional Accountants of Canada, “a bloated, complex and inefficient system that is holding Canada back.” Indeed, the length of the Income Tax Act increased 36% just between 2005 and 2019, and is now 275 times longer than when it was created in 1917. Not only is its length an issue, but its inaccessible language and numerous exceptions increase the cost of complying for taxpayers, forcing them to acquire software like TurboTax or to hire accountants.
Other countries like New Zealand, Australia, and the United Kingdom have all revised their income tax systems substantially, implementing measures to reduce the size and complexity of their tax codes. The added complexity due to COVID‑19 is just one more reason why Canada needs to follow suit.