News Release Archive
FINANCE--TAX LAW CONSOLIDATED, FINES FOR CHEATING INCREASED
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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.
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Contact: Jim Vibert 902-424-4886
trp Nov. 02, 1995