Income Taxes are the main source of Canadian Government Revenue
Income Taxes in Canada are the main source of annual revenue for the Government of Canada. Unlike the United Kingdom and United States of America, Canada used to avoid charging an incometax prior to World War 1 since it was seen as a key point in Canada’s efforts to attract immigrants. Instead it relied on tarifs and customs for its revenue. In the last fiscal year the government of Canada collected 3 times more personal and corporate tax. The Federal government collects personal income taxes and corporate taxes on behalf of all provinces and territories except for Quebec and Alberta respectively. Canadian Federal Income taxes (both personal and Corporate) are levied under the provisions of the Income Tax Act
Canadian Revenue Agency assesses the Tax Liabilty
Tax payers assess their tax liability by filling a return with the Canada Revenue Agency (CRA) by the required filing deadline. Credit Revenue Agency will then assess the return filed and on information it has obtained from employers and Financial companies, correcting it for obvious errors. A tax payer who disagrees with CRA’s assessment of a particular return may appeal the assessment. The individual tax payers must report his or her total income for the year where he or she gets deduction for contributions to Registered Retirement Savings Plans, Union and Professional dues, child care expenses, and business investment losses. The current Canadian Federal Marginal income tax rates on Taxable income for the year 2009 are: From $0 to $10,320—0%; $10,321 to $40,726—15%; $40,727 to $81,452—22%; $81,453 to $126,264—26%; over $126,264—29%;.
Filing of Canadian Income Tax Return
Most Canadian residents have to file income tax return to pay accurate amount of tax owed, to pay back overpayment of benefits such as Employment Insurance, claim benefits such as guaranteed income supplement under the Old Age Security program.
Canadians file income tax returns in one of the ways like Telefile, Service for seniors, Netfile, Efile. The tax return include filling up income tax forms. The Tax packages contain the General Income Tax and Benefit Guide, the T-1 Return and the related tax form and schedules.
