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Harmonization of Ontario's corporate income tax collection system: December 14, 2004.

On December 14, 2004, the Institute filed comments with the Hon. Dalton McGuinty, Premier of Ontario, lauding the Ontario government's proposal to harmonize the Ontario income tax collection system with the federal tax system. TEI's comments, which took the form of a letter from TEI's Toronto Chapter President, Mary T DiBattista of Stelco, Inc., was prepared under the aegis of the Chapter's Ontario Tax Committee, whose chair is Robert G. Westlake of General Electric Canada.

As President of the Toronto Chapter of Tax Executives Institute, I want to express TEI's appreciation for the Ontario government's proposal to work with the federal government toward establishing a single corporate income tax collection system.

Tax Executives Institute is the preeminent association of business tax professionals. TEI's 5,400 members work for 2,800 of the largest companies in Canada, the United States, and Europe. TEI's membership includes representatives from a broad cross-section of the business community, with members employed in all major industries and sectors of the economy. Canadians make up approximately 10 percent of TEI's membership, with our Canadian members belonging to chapters in Toronto, Montreal, Calgary, and Vancouver. In addition, many U.S. and European members work for companies with substantial Canadian and Ontario operations. TEI's Toronto Chapter has more than 300 members and is one of TEI's largest chapters.

Adoption of a single corporate income tax collection system would be a positive first step in the elimination of redundant processes in respect of Canadian taxes. It would increase efficiency for the provincial and federal governments as well as corporate taxpayers by eliminating red tape. Moreover, easing corporate income tax compliance burdens would improve the Ontario business climate. Ultimately, full harmonization of the income tax systems would produce significant cost savings for both levels of government and for Ontario businesses.

We recognize that this proposal is in its formative stage. In your November 3, 2004, speech, you pledged to "streamline the process with the federal government to design a single corporate income tax collection and processing system." The following day, Finance Minister Sorbara presented the 2004 Ontario Economic Outlook and Fiscal Review to the Ontario House. He said, "Ontario and the federal government will begin working immediately to design a single federal tax collection system for both Ontario and Federal corporate taxes." In TEI's view, a single corporate income tax collection and processing system is one where the Ontario income tax is calculated on the federal return, reported and paid to the federal government, and audited by the federal government. In addition, we believe the assessment and appeal process should be handled by the federal government. In short, we look forward to the Ontario corporate income tax collection system becoming identical to that of the other Agreeing Provinces. Anything short of full harmonization of the income tax systems would diminish the desired level of efficiency and taxpayer service envisioned by your government and desired by TEI's membership.

As a result, we encourage the Ontario government to move forward on this initiative. Ontario business is a key driver in the prosperity for Ontario and Canada as a whole. In today's global environment, any advantage that can be achieved by improving efficiency or minimizing redundant government and taxpayer operations will enhance the competitive position of Ontario businesses.

Tax Executives Institute appreciates your support for establishing a single corporate income tax collection system with the federal government. This letter was prepared under the aegis of the Toronto Chapter's Ontario Tax Committee, whose chair is Robert G. Westlake. If you should have any questions about this letter, please do not hesitate to call Mr. Westlake at 905.858.5379, or me, at 905.528.2511, ext. 4644.
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Publication:Tax Executive
Date:Jan 1, 2005
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