What Canadians have to lose by not paying taxes
Canadians who don't file their tax returns are sometimes shocked to find out how much money the government owes them.
There are categories of people in Canada who do not file tax returns. By hiding their income, they deprive themselves and their families of payments from the federal government. According to a 2020 analysis, about 10-12% of Canadians do not file their tax returns.
By deciding to save money or cheat the government, families lose benefits for health care and the ability to sponsor parents if they want to come to Canada. They won't be able to take out loans for cars, real estate and other big purchases. The Canadian government is trying any way to support low-income citizens. Withholding income makes it impossible for them to get special payments.
Most assistance programs involve checking your tax returns. And only after that are applicants eligible for special benefit programs.
Among those who evade taxes, young and single men or low-income families are more common. The country has many programs to optimize taxes, reduce them and exempt them altogether. In order for an immigrant to receive benefits from the government, he must obtain a social security number.
Every person who stays in the country for more than 183 days and receives income there becomes a tax resident. Every resident is required to file his or her own tax return by May of the following year for the previous year. It is possible to calculate the approximate amount of tax by yourself.
The tax system in Canada is quite complicated. Each province has its own tax rates, which must be calculated along with the federal tax. But compared to other countries, Canada is considered one of the best in terms of the taxation system and socially-oriented policy.
Income tax is directly related to wages (figures rounded up):
- From $7,500 CAD to $42,700 CAD — 15% tax;
- From $42,700 CAD to $85,400 CAD — 22% tax;
- From $85,400 CAD to $132,400 CAD — 26% tax;
- All amounts above $132,400 CAD are taxed at 29% (For example, on an annual income of $150,000 CAD on $132,400 CAD the tax is 26% and on the remaining $17,600 CAD the tax is 29%).
Grants, state benefits for children, scholarships, insurance payments and payments to retired veterans are not taxed.
