News Release Archive
FINANCE--TAX LAW CONSOLIDATED, FINES FOR CHEATING INCREASED ------------------------------------------------------------ A bill consolidating and modernizing major Nova Scotia tax laws, and containing severe new penalties for breaking those laws to avoid taxes, was introduced in the legislature today. Finance Minister Bernie Boudreau introduced the Revenue Act, a consolidation of three existing tax laws. The bill simplifies and streamlines administration of health services, tobacco and fuel taxes. It also contains hefty penalties for tax evasion, as part of what the minister called a major assault on the underground economy. "People who deal in the underground economy are not just cheating the government. They are cheating their neighbours who pay their fair share. They are cheating the legitimate businesses of Nova Scotia, who must try to compete on an uneven playing field." Mr. Boudreau said the government estimates that $83 million a year in tax revenue is lost "under the table." If the government could recover those taxes, he said, it could reduce personal income tax by up to 10 per cent, or drop the provincial sales tax to 10 per cent or lower. To deter tax cheaters, the bill will increase fines for contravention of Health Services Tax law to a maximum of $20,000 from the current maximum of $1,000. Contravention of the fuel tax laws will bring fines of up to $10,000 -double the current maximum. And, contravention of the tobacco tax law will carry fines of $10,000 minimum, up to a $100,000 maximum. Default on these fines will result in jail terms ranging from six months to a year. To combat tax evasion in an area of chronic abuse -the cigarette trade -the government is moving the sales tax from the retail level to the wholesale level. Collecting the tax at wholesale will make it significantly more difficult to evade the tax, the minister said, because it will be paid "up front". "This change will level the playing field for the majority - those legitimate retailers who collect and remit all taxes on the tobacco they sell." Mr. Boudreau said the Revenue Act is about "efficient, effective and fair taxation." It standardizes procedures, making it easier on the businesses that collect taxes on the government's behalf. Revision was overdue, he said. Some of the legislation has not undergone comprehensive review in more than 30 years, and "certainly times and technology have changed. The new bill reflects modern business techniques and recent technological advances." Mr. Boudreau acknowledged and thanked the Nova Scotia business community for assistance in drafting the improved legislation. "It was through the insight and practical knowledge of business that we arrived at a bill that makes tax law in Nova Scotia more understandable and user-friendly for the Nova Scotian businesspeople who collect our taxes," he said. -30- Contact: Jim Vibert 902-424-4886 trp Nov. 02, 1995