Canadians have always loved convenience. A network of 26,000 convenience stores across the country, open at convenient hours, offering thousands of products in virtually every neighbourhood in the country, is proof of that.
Neighbourhood convenience retailers are happy to be there to deliver the products that Canadians want, when and how they want them. That is to say, convenient, fast, on-demand. That's not always easy at the best of times, but in the past it's been made significantly harder by Canada's tax system.
You see, while convenience retailers are working hard to make your shopping experience simple and straightforward, the tax environment they face is anything but.
When the Canada Revenue Agency (CRA) announced earlier this year that it was expanding the Liaison Officer Initiative (LOI) to make it easier for businesses to get the help they need as tax collectors for government. It was another positive development in the way that CRA deals with small business. Neighbourhood convenience store retailers could be the happiest of the bunch.
You see, convenience stores sell hundreds of different products, each of which could potentially have its own tax rate (think fuel, alcohol, tobacco), which can change at a moment's notice. They also deal in cash more than most businesses, so they are more likely to get audited, all adding to unneeded stress, especially around this time of year when tax returns are due.
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One store owner in Atlantic Canada shared with me the struggles that she and her staff faced recently when trying to adapt to a rate change on tobacco announced by the federal government. She said that most of the documentation from CRA pertained to cigarettes (sold by the carton), but that because they sell cigars and other tobacco products (not by the carton), it was challenging to know how the changes applied to those products.
What compounded the problem was that CRA required the additional tax to be remitted immediately, so that in some cases she was paying tax to CRA that she had not yet started to collect from her customers. It took hours of staff time, which for small retailers means less time to attend to their customers, support their employees and spend with their families. Oh, and it was the store owner, not the government, who felt the immediate wrath of customers over the hike in prices.
This kind of thing happens more often than you would think. But, with the aid of the Liaison Officer program, businesses like this one can have ready access to a CRA expert, to explain changes and help to cushion the blowback from customers. Most importantly, the Liaison Officer has the knowledge of an auditor, but is only there to suggest, to advise. No audits, no threats, no penalties. Just help. Convenient, huh?
This new approach to tax compliance is exactly what convenience store owners and other small businesses need. It delivers tax help in the same way that convenience stores deliver consumer products: quick, easy, painless. With the potential for any given tax changes to affect the price of dozens (if not hundreds) of products, any relief from the tax man can't come soon enough. And given that convenience retailers collect $21 billion per year in tax revenues, it stands to reason that CRA should help them collect it properly.
Right now, the on-demand LOI service is only available as a pilot in the Toronto and Montreal areas. I urge the government to move quickly to expand this program across the country as soon as possible to help make life a little bit easier for tens of thousands of convenience retailers and their employees.
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