KPMG offshore tax dodge: Trudeau vows to do 'better job' with tax avoiders
CBC News | Posted: March 3, 2017 11:35 PM | Last Updated: March 3, 2017
PM responds to investigation by CBC's the fifth estate/Radio-Canada's Enquête, as NDP calls for full probe
Reacting to a CBC/Radio-Canada investigation into offshore tax dodges, Prime Minister Justin Trudeau has vowed to do a "better job of getting tax avoiders and tax frauders."
The fifth estate, in a joint investigation with Radio-Canada's Enquête, revealed the names of several wealthy Canadians who appear to be linked to shell companies set up by KPMG in the tiny tax haven of the Isle of Man.
Canadians who bought into the tax scheme declared they were "gifting" their money to an offshore jurisdiction. The money would be invested and any returns would be "gifted" back. Because these returns were so-called gifts, it would all be tax-free.
KPMG has consistently insisted that this "Offshore Company Structure," as they called it, complied with Canadian laws
Documents obtained by the fifth estate and Enquête show 21 "high net worth" Canadian families signed up for the massive tax dodge from 1999 until 2012 — when it was first detected by CRA auditors.
PM responds
During an event in Vancouver on Friday, Trudeau was asked if he would reopen a parliamentary finance committee's inquiry into the KPMG scheme "in light of these new allegations."
The prime minister avoided referencing KPMG directly, saying "it is absolutely unacceptable that there be people not paying their fair share of taxes."
Trudeau said his government has put $440 million into the Canada Revenue Agency to "to ensure we are doing a better job of … going out and getting tax avoiders and tax frauders."
"That's something we're going to continue to do," he said. "We know that there is always more work to do, but it's something we continue to take very, very seriously.
"We know Canadians want to make sure that people are paying their fair share of taxes."
Calls for 'thorough investigation'
Meanwhile, the NDP is calling for an investigation to uncover the full extent of the KPMG affair.
"The Liberal government must conduct a thorough investigation into this scheme and commit to ending these secret, penalty-free amnesty deals for tax evaders," said Pierre-Luc Dusseault, the party's revenue and finance critic.
- KPMG offshore tax dodge a 'facade' designed to hide money, ex-client says
- Canada Revenue offered amnesty to wealthy KPMG clients in offshore tax 'sham'
The KPMG tax dodge first stirred controversy last spring when CBC revealed that the CRA offered a secret sweetheart deal — in effect, an amnesty — to the accounting firm's clients who had been caught using the scheme.
The offer granted KPMG clients "no penalties" provided they paid back taxes and modest interest.
But Revenue Minister Diane Lebouthillier insisted Friday that legal proceedings have not been abandoned against any clients who used the KPMG scheme, which the CRA has described as a "sham."
"I insist there was no amnesty and there will not be an amnesty," she said.
The minister also released a statement on Sunday, saying "the CRA continues to take action on a number of fronts, including actively seeking further information through the courts" in relation to the KPMG file.