According to the “New penalties for businesses that use illegal electronic sales suppression software” this blog, I knew that electronic sales suppression (ESS) software is banned in Canada as it helps people evade taxes by deliberately deleting part of their sales from their computer records. Even though people know it is illegal to do this, there are still some Canadian businesses which buy and use it. The CRA set new policies about new penalties for this action.
Maybe some people think the new penalties are too strict, but I think the CRA is doing the right thing because I have realized the gravity of the situation. The government needs tax revenue because the number of retired people who need pensions is becoming larger and larger in Canada, so the government needs to spend more on the pension parts. If the penalties for using ESS software are not strict enough, more businesses will swindle the taxes off of the government in order to make more profits. As a result, the government will lose a lot of money.
Besides, the government also needs enough money to do something else like investments. If the authorities do not take measures like an administrative monetary penalty of $5,000 on the first infraction and penalties of $50,000 on each subsequent infraction to prevent tax fraud, there will be more and more behavior of taxes evading. What’s more, the tax revenue is an important part of income statement for the government. The budget for road construction mostly comes from the tax revenue.
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