www.lexisnexis.ca Vol. 32, No. 6 May 2016
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Caution urged in wake of massive documents leak

More than 11.5 million leaked confidential documents from a Panama law firm have shed unprecedented light on the alleged operations of more than 214,000 shell companies in tax havens around the world. The Panama Papers contain files for some of the world’s wealthiest and most politically connected individuals in more than 200 countries, dating back to the late 1970s.

“I’m astounded at the size and extent of it. There have been other leaks before, but this is huge,” said Dennis Howlett, executive director of Canadians for Tax Fairness in Ottawa.
 

Harsh measures to tackle deficit in Newfoundland

Economically Newfoundland and Labrador is between a rock and a hard place. Now the provincial government — on the heels of a grim warning from the province’s auditor general — has handed down what is perhaps the country’s hardest-hitting budget in an effort to stem a debt that is spiraling out of control.

The recent budget contains both significant cost-cutting and revenue-generating measures, including raising taxes almost across the board, levying new fees and cutting hundreds of public sector jobs.

Income taxes, gas taxes and other premiums are increasing, as is the province’s harmonized sales tax — rising from 13 to 15 per cent.

Kevin Dancey took over as president and chief executive officer of the Canadian Institute of Chartered Accountants (CICA) in May 2006 expecting to serve only a four-year term. But a unique opportunity to help spearhead an historic merger of the accounting profession in Canada presented an irresistible challenge that ultimately led to a much longer tenure.

“At the end of that four-year time, the CICA board chatted about unification and I thought that was the appropriate thing to try,” Dancey said.

The federal government has fleshed out some details about how it intends to spend the $444.4 million allocated over five years in the 2016 budget to tackle tax evasion and aggressive tax avoidance. But experts are skeptical whether measures such as hiring more auditors and cracking down on tax havens like the Isle of Man will be enough to turn the tide.

And they question the extent to which the government will be able to quantify the “tax gap” in light of a lot questions raised by the leak of the Panama Papers that revealed the alleged operations of more than 214,000 shell companies in tax havens around the world.