Offshore Tax Haven Prosecution Pitifully Low As Sheltered Money Spikes: Reports

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Only 44 Canadians have been convicted of offences related to offshore tax havens since the Harper government came to power — a period during which the amount of Canadian money held in the largest offshore havens is estimated to have doubled. (Shutterstock photo)
Only 44 Canadians have been convicted of offences related to offshore tax havens since the Harper government came to power — a period during which the amount of Canadian money held in the largest offshore havens is estimated to have doubled. (Shutterstock photo)

Only 44 Canadians have been convicted of offences related to offshore tax havens since the Harper government came to power — a period during which the amount of Canadian money held in the largest offshore havens is estimated to have doubled.

According to documents from the Canada Revenue Agency (CRA), tabled in parliament Thursday, 44 taxpayers were convicted of crimes related to offshore accounts between April 1, 2006, and March 31, 2012.

This involved $7.7 million in federal tax evaded and the court sentences totaled $6.8 million in fines and 337 months in jail,” stated the CRA document, which was posted to the web by CBC’s Kady O’Malley. The agency had put together the report at the request of opposition members of Parliament.

In 37 of the 44 cases, the convictions were secured through guilty pleas. Seven cases went to trial, the CRA said. Fines ranged from $12,000 to $1.1 million, and jail sentences ranged from zero to 48 months.

The agency would not release the names of the convicted persons, due to privacy regulations.

The CRA report comes as Canadians for Tax Fairness (CTF) released a new report estimating that the amount of money held by Canadians in the world’s 12 largest tax havens has reached $170 billion.

Extrapolating from StatsCan data, the CTF, which “promotes a progressive tax system,” said the amount of money held in the top three tax havens — Barbados, the Cayman Islands and Luxembourg, has doubled since 2005, to $109 billion.

“That is $109 billion hidden away, untaxed, while the rest of us pay our share on every cent we earn,” CTF executive director Dennis Howlett said in a statement.

Tax evasion jumped into the spotlight as an issue last month when an international consortium of journalists released leaked data on tens of thousands of offshore accounts, including, reportedly, those of 450 Canadians.

The government found itself in a tug-of-war with the CBC and the journalists’ consortium over access to the data.

But the U.S. announced Thursday it is teaming up with the U.K. and Australia to expose the tax cheats listed in the data leak. While a report at the CBC questioned why Canada wasn’t part of the team, the Canadian Press reported that Revenue Minister Gail Shea expects the U.K. will share the data with Canada.

The U.S. Internal Revenue Service said it had acquired substantial data about assets hidden in Singapore, the British Virgin Islands, the Cayman Islands and the Cook Islands.

On Wednesday, the Canadian government announced it was creating a team of six to 10 bureaucrats that would be devoted to pinpointing tax evaders.

Liberal Senator Percy Downe has been pushing the CRA to begin estimating Canada's "tax gap" — the amount of money government would be collecting in revenue if offshore havens didn't exist. Though many countries estimate this number, the CRA has so far refused to do so.

“Revenue Minister Gail Shea has said that she is ‘considering the ... request, and will respond in due course’. Not good enough. Canadians deserve the facts, and only once we have them can we truly understand the extent of the problem of overseas tax evasion and just how much our country may be losing out on programs and benefits that could be funded by this lost money,” Downe said in a statement earlier this week.

With files from The Canadian Press

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