A new study from the Conference Board of Canada gives our first estimates of the total size of the tax gap, and the news isn’t good. At a minimum, it’s an $8.9 Billion hole, but may be as high as $47.8 Billion annually, or nearly half a trillion dollars every decade. Comparing that to the federal deficit projected at $29.4 Billion in the 2016-17 fiscal year, closing that gap could make a significant dent or wipe it out completely.
With billions of dollars on the line, a new approach is necessary. In light of revelations from the Panama Papers, last year the CRA set up an offshore tax evasion tip line. While this is a start, it’s simply not enough.
Advanced data analytics technology is one of the most important steps to closing the tax gap. The HMRC utilized analytics is extremely effectively in the U.K., with a 2014 report showing an additional £2.6 Billion collected in a year while reducing staffing by 40 per cent. Based on early success, the HMRC is expanding on that program in 2017. Belgium used this same approach to detect value added tax (VAT) fraud rings, closing a €1 Billion gap by 98 per cent.
From Belgium to Ireland and across the US, governments around the world are employing analytics to reduce fraud and other types of tax evasion.
Tune into this webinar where Matthew Stewart, associate director of the National Forecasting Division, Conference Board of Canada (CBOC) will share the findings from the recent Conference Board of Canada study “Examining the Potential Canadian Tax Gap” and reveal how countries, like UK and Belgium are closing the tax gap with advanced analytics and how Canada can stand to benefit.
Carl Hammersburg is the Manager or Government and Healthcare Fraud and Risk at SAS, the leader in analytics. In his role Carl leads the team assisting government organizations in the use of analytics, process change and data sharing to eliminate tax evasion, the underground economy and abuse of social service programs. Prior to joining SAS, he spent 20 years in tax and healthcare audit, collection and anti-fraud activities in Washington State. Carl can be reached at Carl.Hammersburg@sas.com