Let it be said: few people jump for joy at the idea of filing their tax return.
The process is long and complex, and requires finding and entering information from a variety of tax slips in order to justify your income and the deductions to which you are entitled. The exercise itself is about as enjoyable as waiting in line at the Société d’assurance automobile du Québec (SAAQ).
However, it remains less worse than another solution regularly put forward: that of entrusting the tax collector with the task of calculating for you how much you owe him. Stéphanie Grammond is the latest to have, on these screens, extolled the merits of such a system.
It must first be recognized that, fundamentally, the interests of revenue officials diverge from those of taxpayers.
Whether tax officials are employed by Revenu Québec or the Canada Revenue Agency, their employer expects them to maximize the revenue collected by the state – that is, what they take out of your pockets.
On the taxpayer side, even the most fond of social programs try to maximize their tax deductions, and therefore the money that will remain in their pockets. You will have great difficulty finding a person who voluntarily chooses not to protect himself from the tax credits to which he is entitled, for example.
Faced with these divergent interests, it is not unreasonable to believe that the tax collector who would complete your return would risk putting his interests first and not yours. Without impugning his intentions, we can imagine that he would spend less time correcting the errors that make you pay more than those that reduce your tax bill.
Six million erroneous declarations
This is what British taxpayers experienced when their government gave the Department of Revenue responsibility for filing the returns. Out of 6 million erroneous declarations that year, three-quarters of the errors in the documents that the tax authorities gave to taxpayers overcharged the tax.
These errors are no exception either. When the system was implemented in France in 2006, one out of four declarations contained errors. In 2018, half a million French taxpayers were still affected by these problems.
When you ask the tax authorities to take care of filling out the tax returns, another problem arises: you don’t necessarily save time since you have to correct your mistakes.
Tax experts looked into the question in 2017 and analyzed the average time a taxpayer spent filing their tax return in around 30 countries – with or without returns filled out in advance by local revenue agencies.
In Canada, the average at the time was one hour. In France and the United Kingdom – two countries where the tax authorities take care of doing the declarations for you – the duration climbed to two hours. Among the dunces was Austria, with more than five hours spent on average per taxpayer – despite tax officials having already done the job.
The problem with our tax system is therefore not the person who completes the report, but rather the complexity of the latter. This is a point at which Mme Grammond rightly touches in his editorial.
The fact is that, in its current format, the tax code is so complex that even the officials responsible for administering it make mistakes. When the Auditor General of Canada in 2017 looked at the Canada Revenue Agency’s call centers, he found that one in three answers given by revenue officials to taxpayers calling them were wrong.
As frustrating as it may be, it’s hard to hold it against them considering that the tax code they’re supposed to enforce is 1,203,966 words long. That’s about 120,000 words longer than the seven Harry Potter books. Even the biggest potterheads couldn’t recite every single passage from the books to you.
If even the officials who must administer the tax code 40 hours a week, 52 weeks a year are wrong, it should come as no surprise that taxpayers are confused. Our governments would do a lot more to help us by tackling it – and simplifying it – than by having revenue officials do our taxes for us.