Thank you, Mr. Speaker. Who likes tax audits? I clearly don’t and I can speak for many, as well; however, the need to validate compliance with tax laws is paramount, and unfortunately, a tax audit is such a measure of testing this effectiveness. I will be asking the Minister of Finance today questions pertaining to our two self-reporting tax categories of tobacco and fuel.
Tax assessments for tax law noncompliance are a critical measure for government performance and transparency.
Can the Minister of Finance share with the House how many tax audits were performed for both self-reporting tobacco and fuel tax for the 2013-2014 fiscal year? Thank you.
Thank you, Mr. Dolynny. The Minister of Finance, Mr. Miltenberger.
Thank you, Mr. Speaker. There were two tobacco tax audits in 2013-14, one in Edmonton and one in Hay River. There were 18 petroleum products tax audits in 2013-14 and all 18 were in Yellowknife. Thank you.
From the findings we received today here from the Minister for the ’13-14 fiscal year, can the Minister indicate what was the breakdown of the amount of the additional assessment of dollars recovered for both tobacco and fuel tax?
The additional net adjustments for tobacco audits was $378,000, and the additional net adjustments for petroleum products was $2.360 million.
What we’re hearing from the Minister today, if we compare this to last year’s public accounts, we’ve increased somewhat a number of our tax assessments from the previous year but this is translated, I believe, to a substantially larger assessment of dollars being recovered. Just my quick math here, showing about $2.7 million recovered, which is incredible.
Given these startling numbers, what measures are the Minister or the department prepared to change on how we deal with the self-reporting tax for both tobacco and fuel?
Effective April 2014 there were two additional tax audit positions put into play. It was approved during the business planning process. The regional structure was put in place. One of the new auditors was in Hay River and the other one in Inuvik to complement the manager of tax audit. We talked tax audit positions in Yellowknife. The 2014-15 audit work plan was created based on general risk assessment of the tobacco, petroleum products and payroll tax areas. Training of the new auditors, implementation of the regional structure is a focus for 2014-15, and the work plan the following planned audits for 2014-15. There were, for tobacco, four wholesaler audits, there were eight major wholesale audits, 11 in total, two in Yellowknife, one in Hay River, one in Inuvik, 17 retail audits within seven communities, 115 retailers in the NWT, six in Yellowknife, five in Hay River, six in Inuvik. The current status is eight out of the 17 retail audits have been completed to date, six in Yellowknife, one in Inuvik and one in Hay River. There have been no wholesaler audits completed to date. There have been no issues noted on the audits based on the audits to date.
Petroleum audits, five audits of major collectors, 45 and 50 active collectors, 12 of which have been major collectors, two in Yellowknife, two in Hay River and one in Inuvik. For audits of non-major collectors, one in Yellowknife, two in Inuvik and one in Hay River. Current status is there is one audit of a major collector in progress in Yellowknife. Four other audits are also in progress, one in Yellowknife, two in Inuvik and one in Hay River.
Thank you, Mr. Miltenberger. Final, short supplementary, Mr. Dolynny.
Thank you, Mr. Speaker. I appreciate the Minister’s fine forensic audit on that audit.
Given the increased interest of these two self-reporting categories, can the Minister indicate to the House why is the information of tax assessment and additional dollar recovery not readily available to the public? Of course, I understand confidentiality of locations of wholesalers and retailers are critical, however, the aggregate of such information is not. So why is it that this department is not sharing audit information publicly?
We are as transparent as possible. We, of course, are interested in being more transparent if that’s possible. We would be more than happy to have discussions with the Member and with committee about what improvements could be made.
I would also just like to touch on some additional information that I didn’t touch on before. There were also payroll audits done, payroll tax audit. Two major payroll tax collectors, and there were two done in Hay River, 23 additional payroll audits are planned, five in Yellowknife, 12 in Hay River, six in Inuvik. The current status is one of the major collectors audits is in progress and that one is in Hay River.
I appreciate the interest of the Member and we would be, of course, more than willing to have any type of discussion the committee sees as important in improving the transparency of the operation and the accountability that is currently in place.
