The Canada Revenue Agency collects various types of taxes. These taxes are income tax, GST/HST, and payroll taxes. The jurisdiction of CRA collection does not include provincial taxes such as gas taxes, property, or municipal taxes. CRA has contractual arrangements with certain provinces to help in collecting their provincial program outstanding dues. An example of such an arrangement would be when CRA will use refunds on personal income tax as adjustments against outstanding taxes to benefits programs of selected provinces at the request of that particular province.
CRA collection’s responsibilities
CRA collection is responsible for most individual income tax brackets in Canada with the exception of those residing in the Province of Quebec and Alberta. CRA administers the tax collection procedures from the majority of provincial corporations in the country.
CRA collection is also responsible for the Goods and Services Tax in all the provinces with the exception of Quebec as Revenue Quebec manages the collection on its own. It also collects the Sales Tax and the GST on behalf of CRA. When it was introduced about twenty-two years ago, the GST was fixed at 7% as add on to the value of goods and services, but it was reduced to 5% a few years ago.
In few provinces, the Goods and Services Tax has been transformed into the Harmonised Sales Tax. These provinces are British Columbia, Newfoundland, Labrador, Nova Scotia, and Ontario. The HST blends both the GST and the provincial sales tax into one category. HST is administered by CRA.
The expectations of CRA collection
CRA collection practices make it clear to the taxpayers that they have to honor the payment of taxes upon receipt of the Notice of Assessment by the thirtieth of April of a calendar year for the previous year?s assessment. CRA collection authorities expect all taxpayers to file their income tax returns and settle any outstanding balances that have been carried forward from the previous years.
To ensure fair practices and equitable allowance to all the tax collectors under the self-assessment system, CRA collection uses stringent measures to make sure that the taxes are paid on time. CRA collection tends to take a firm but effective approach to collect all outstanding account from the collectors who have not paid their taxes. Every reasonable effort is put in to enforce the collection deadlines.
The Procedure of CRA collection
In situations where the outstanding balances are not cleared within a month?s period from the date when the Notice of Assessment has been issued, a provision is made to issue a second notice request for the owed balance by means of telephone contact. If the balance still remains outstanding and there is no arrangement or discussion about payment of the tax dues, then a final notice is issued to the collector. If there is no sign of the payment coming in within ninety days from the date of the Notice of Assessment, then legal action is pursued by the CRA collection.
The taxpayer?s income will be garnished. This means that the CRA collection agencies may intercept funds receivable by the concerned taxpayer and in certain cases, the sheriff of the province may be directed to seize and liquidate the personal assets of the defaulters. The final CRA collection will include the interest charges on the balances that have remained unpaid.
If you have tax debts issues and have CRA collection agent going after you, delay no further, ask experienced tax consultants in Tax SOS to help at 1-877-982-9767.