On March 17, 2016, Finance Minister Carlos Leitão tabled the Quebec budget for 2016-2017. Entitled “For a modern, prosperous Quebec”, this budget confirms that the government has achieved its objective of balancing the provincial budget for 2015-2016.
While this year’s budget does not introduce any specific commodity tax measures, it does propose a number of income tax benefits and credits for Quebec families and businesses. The current government has also renewed its commitment to reduce the Health Service Fund contribution rates for small and medium-sized businesses.
The Fight Against Tax Evasion
In its budget, the Government of Quebec reiterated its commitment to continue the fight against tax evasion and, in particular, illicit trading in tobacco and alcoholic beverages, unreported work in the construction sector, economic and financial crime, and the use of organized networks resulting in unreported work.
To achieve its objectives, the government has identified several sources of tax losses to be addressed, including the concealment of illegal income, failing to obey tax rules, and tax avoidance. As in past budgets, the government is counting on its fight against tax evasion and avoidance to help preserve the revenues needed to fund public services.
Furthermore, the government has deployed several efforts to recover revenue that has been lost due to tax avoidance, including its voluntary disclosure program, agreements for the exchange of information with the Canada Revenue Agency, and various measures designed to combat aggressive tax planning.
Along the same lines, the government has announced the addition of new provisions to the Act respecting duties on transfers of immovables, and intends to address tax avoidance in this area by:
- tightening certain exemptions;
- introducing a mandatory disclosure mechanism for non-registration of transfers and non-compliance with certain exemption conditions; and
- using the date of the transfer of the immovable to determine when the transfer duty becomes payable, instead of the date when the deed recording the transfer is registered in the land registry.
Improving the Performance and Efficiency of Revenu Québec
In 2016-2017, Revenu Québec intends to launch several initiatives in order to improve both the quality of its relationship with taxpayers and its overall efficiency.
With respect to its relationship with taxpayers, Revenu Québec has already drawn up an action plan, which was published on January 26, 2016 in response to harsh criticism received from the Quebec Ombudsperson. More information on Revenu Québec's Action Plan can be found in the Tax Developments section of Ryan’s website.
In an effort to improve its efficiency, Revenu Québec plans on reducing the public and private costs of its revenue collection activities, and adopting new practices to address the use of tax havens and the repercussions of new technologies.
In order to improve taxpayer behavior, encourage the self-assessment of tax, and improve tax compliance, Revenu Québec will undertake to facilitate more interaction with taxpayers, ensure the accuracy of information provided to those persons, and simplify access to various online services, which are to be expanded and enhanced.
Further information on Quebec’s 2016-2017 budget can be found on the province’s website at http://www.budget.finances.gouv.qc.ca/budget/2016-2017/index_en.asp