The federal government is introducing free automatic tax filing in an effort to help qualified Canadians complete simple tax returns more quickly and easily. Some government benefits are normally paid to those who file their taxes, but many with low or fixed incomes neglect this process – meaning that they miss out on benefits that they would otherwise qualify for.
This new policy especially targets Canadians who would otherwise slip through the cracks, aiming to help them gain the benefit from filing tax returns. As CRA software can easily handle the necessary tasks as long as the right income data is inputted, it is no longer necessary for people with simple returns to waste time and money filling out comprehensive forms.
For example, each year approximately 12% of First Nations working people do not file their tax returns with the CRA – even though, in many of these cases, the process would yield a considerable financial reward. This simple change in policy could lead to reduced poverty levels, along with a much more convenient annual tax filing experience for many citizens.
In 2018, the government launched a free telephone service to ease the process. Called “File my Return”, the scheme was put in place to help Canadians collect their benefits. However, many First Nations people distrusted the system and failed to take advantage of it.
“If we’re going to deliver benefits through the tax system then we absolutely have to rethink our tax structure that was set up in 1918. A significant number of vulnerable people are missing out.” said Lindsay Tedds, a professor of fiscal and economic policy at the University of Calgary. Time will tell whether the new automatic tax filing system can solve this issue once and for all.