The income tax ontario system and governing body of that system in the country of Canada works a little differently than the neighboring Internal Revenue Service system of the United States. A large amount of fiscal revenue in the country is produced from income taxes. The country is cognizant of the fact that the country of Greece is in economic despair, primarily based on its tremendous tax evasion issue. This has actually been the catalyst to its country’s bond rates being so high because there is such a high probability of them not being paid. Therefore, the investor is taking on tremendous risk investing in such a country. Each of the provinces of the Country of Canada makes sure they have stringent Tax codes to limit tax evasion and maximize the revenue needed to fund projects in areas such as education, transportation, and defense. Unlike the United States, Canada’s fiscal year ends March 31st whereas the United States ends Dec 31st with taxes due on April 15th, unless an extension is granted. In the United States a majority of taxable income is collected from corporations, whereas in Canada personal income tax far outnumbers that collected from businesses. Specifically, the province of Ontario has its own dedicated Minister of Finance that overlooks the tax collection system. There are four separate income tax brackets in Ontario and unlike the United States there isn’t a differentiation between single and dual family household cumulative amounts. The four brackets in the 2014 tax year were 0-40,120; 40,120-80,242, 80,242-514,090, and 514,090 and above. Astonishingly, the range of taxes were a meager 5 percent to 13 percent, which is nowhere in comparison to the amount of its American counterparts.
Some of the other functions the Ministry of Ontario performs is assisting the Minister of Finance, Cabinet, and the Premier in designing tax code and economic policies. The department also reports on Ontario’s economic and fiscal plans and previous year’s results for public consumption. Budgets must also be created at a midpoint during the year which is called the Fall Economic Statement. One of the most important criteria for the Ontario ministry being successful in its collection of taxes to stimulate the funding of capital expenditures is the promotion of the standards of current day controllership housed in the Ontario Public Service such as in the University System, hospitals, and school boards. The Ministry alone is responsible for most of Ontario’s most important tax laws as well as many of the tax credit programs and other incentives that its tax payers can benefit from. The country makes such to educate its constituency through various online literature, public service announcements, and other propaganda to ensure that its taxpayers realize the importance of providing fiscal revenue. Penalties for the evasion of taxes is also made quite clear. Substantial jail time is given to those who wish to evade.The economy of Ontario is thriving and one of the primary reasons for this is because the way the tax structure in the land has been handled over the last several decades. Unlike many other countries, in Ontario the tax collection agreements made here allow different governmental entities to administer taxes through one specific tax collector. The federal government oversees all of these processes for every province and collects personal income taxes from everyone except Quebec, while all corporate taxes are collected by them as well for all provinces except Alberta. The Canada Revenue Agency, in essence, could be considered comparable to the Internal Revenue Service, whereas each province can be considered somewhat comparable to each states department of revenue.
Similar to the United States the tax collection system for individuals in Canadian provinces is based on one’s own analysis of their tax situation which of course is subject to audit if there is reasonable suspicion of error, whether intentional or unintentional. Also in alignment with the practices of the United States is that there is a unique distinction between tax evasion and tax avoidance. Tax evasion lands you in a federal penitentiary, while tax avoidance is a legal means of investing your money in tax deferred or tax free vehicles. For instance if a tax payer contributed their money into a traditional IRA they would be able to deduct those funds from their taxable income for the year. However, if that same person put $50,000 in a safe that they received in a business deal and never claimed it then they would be found guilty of tax evasion on most probably money laundering as well. It is important that the federal tax bodies work in conjunction with the individual provinces to assure seamless interactions. Overall the Ontario tax collection system has very few flaws and leads to a strong financial infrastructure.