For Immediate Release
Thursday, June 6, 2019
OTTAWA – Canadians remain in the dark three years after one of the biggest accounting firms in the country convinced the government to shut down hearings into its infamous Isle of Man tax scheme.
“This government says it is cracking down on offshore tax dodging but it sends Canadians a very different message by appearing to leave large companies like KPMG off the hook,” said Toby Sanger, executive director of Canadians for Tax Fairness.
The KPMG tax sham allegedly involved setting up shell companies in the Isle of Man, a known tax haven, to help wealthy clients avoid paying Canadian taxes. In response to the scandal, the Finance Committee started hearings into this scheme. But at the last minute, on June 7, 2016, KPMG lawyers pressured the government into issuing a gag order – silencing expert witnesses including Canadians for Tax Fairness who had been invited to speak by arguing that the cases were before the courts.
Three years later, the public has received little in the way of answers. Just last week, CBC News reported the Canada Revenue Agency settled with wealthy clients involved in the scheme.
“If this case has been settled, then there’s no reason why the Finance committee can’t restart its hearings,” said Sanger. “Canadians deserve to know if the government is taking action against KPMG for promoting these schemes, or letting them off the hook,” he added, noting that south of the border, KPMG paid US$456 million in penalties to the U.S. government for its role in creating fraudulent tax shelters.
The CRA issued a press release this week to celebrate its first year as a member of the Joint Chiefs of Global Tax Enforcement (J5), an international body of revenue and law enforcement officials from several nations working together to tackle enablers of tax evasion.
“It’s good to know Revenue Canada is cooperating internationally on these problems, but we need far more transparency and action here at home,” said Sanger.
Canadians for Tax Fairness advocates for fair and progressive tax policies aimed at building a strong and sustainable economy, reducing inequalities and funding quality public services.
Toby Sanger, Executive Director
Erika Beauchesne, Communications Coordinator