In Quebec unpaid taxes rise by 1 billion

In Quebec, unpaid taxes rise by $1 billion

Unpaid taxes to the Quebec government have increased by $1 billion in four years, a situation attributed, among other things, to the pandemic and the rise in interest rates.

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The net value of tax liabilities was $4.1 billion as of March 31, 2023, compared to $3.1 billion as of March 31, 2019, Revenu Québec tells the Journal.

The increase is particularly pronounced within companies. Corporate tax amounts payable increased from $800 million as of March 31, 2019 to $1.2 billion as of March 31, 2023, an increase of 50%.

This increase is greater than the amount Quebec collected in taxes from corporations during the same period. These recorded a 44% increase to almost $9.2 billion in the 2022-2023 financial year, according to public accounts prepared by the Treasury Department.

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    QUB :

More than 360,000 companies

At the end of March 2023, more than 360,000 companies had money with the tax authorities (taxes, duties or withholding taxes), 31% more than four years earlier. This is more than half of all companies registered with Revenu Québec.

$2.9 billion

On the personal side, unpaid taxes were $2.9 billion as of March 31, 2023, compared to $2.3 billion as of March 31, 2019, an increase of 26%.

During the same period, the amount of taxes collected from individuals increased by 33% to $42.3 billion in the 2022-2023 fiscal year.

More than 1.17 million private individuals had money with the tax office at the end of March 2023, 5.4% more than four years earlier. This represents approximately 16% of all individual taxpayers in Quebec.

In Quebec unpaid taxes rise by 1 billion

“The share of taxpayers who owed less than $2,500 was 80% in 2023 and 85% in 2019.”

– Claude-Olivier Fagnant, spokesman for Revenu Québec

Photo Photo from Revenu Québec website

The increase in overdue amounts can be explained, on the one hand, by the pandemic, which prompted the government to take easing measures.

“Certain collection activities were suspended and then gradually resumed,” recalls Mr. Fagnant.

The sharp rise in interest rates that will begin in 2022 also had an impact. This “would explain around 10% of the observed debt value growth,” reveals the spokesman.

Will the increase in unpaid taxes affect public finances?

“Despite the increase observed in 2023, the ratio of tax debts to tax revenues, namely 6.2%, remained relatively stable compared to 2019,” replies Charles-Étienne Bélisle, spokesman for the Ministry of Finance.

“The increase in delinquent taxes has not yet had a significant impact on bad debt expense,” he added.

Debts abandoned, debts collected

Importantly, the tax claims figures do not include amounts that were the subject of “provisions for the realization of non-revenue”, i.e.

Revenu Québec says it collected $3.28 billion in tax debt in 2022-2023, up 1.8% from the previous year.

The organization also recovered nearly $3 billion by conducting “fiscal control” activities aimed at “targeting certain taxpayers.” […] declare their income and pay the amounts due.

Let us also remember that about 30% of individuals and 40% of companies do not have to pay taxes or contributions for various reasons (insufficient income, tax credits, non-profit organizations, etc.).

The federal government is owed more than $2 billion

Just over 891,000 people in Quebec owed federal taxes in March 2023, up 32% from March 2019, the Canada Revenue Agency (CRA) says. These Quebecers then owed the federal government $2.02 billion. Across the country, more than 3.9 million individuals owed taxes to the federal tax authorities in March 2023. Their debts totaled $21.9 billion.

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