ARTICLE · 26 JULY 2022

Mind The Gap: Comments On Canada's Tax Gap

Lawson Lundell LLP

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In June 2022, Canada published a report concerning its tax gap. A "tax gap" is the difference between (a) the amount of money a tax authority could collect, in theory,

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Gareth Williams

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In June 2022, Canada published a report concerning its tax gap.¹ A "tax gap" is the difference between (a) the amount of money a tax authority could collect, in theory, if everyone complied with the law; and (b) the amount in fact collected. Canada's tax gap has remained stable for the period 2014 to 2018, at 9% of tax revenue.² This translates to between $20 billion and $24 billion for the years in question (because Federal tax revenue increased). This briefing note addresses an interesting aspect of the Canadian approach to reporting the tax gap, namely the decision to publish both the "gross" and "net" gap (described in detail below) and makes certain comparisons with the UK and the US.

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