GST Fraud: CIBC/Chamber Weekly CEO/Business Leader Poll by COMPAS in the Financial Post for Publication December 2, 2002

Transcription

1 GST Fraud: CIBC/Chamber Weekly CEO/Business Leader Poll by COMPAS in the Financial Post for Publication December 2, 2002 COMPAS Inc. Public Opinion and Customer Research

2 Introduction While acknowledging that GST crime ought to be addressed, Canada s business leaders tend to take a sanguine view of it. More business leaders believe that the problem is exaggerated or hyped than that GST crime is rampant and very serious. Few respondents in the weekly web-poll of business leaders believe that a significant jail sentence should be meted out a majority favours no imprisonment or at most a year. These are the key findings from the current web-survey of CEOs and other business leaders conducted by COMPAS on behalf of the National Post under sponsorship of the Canadian Chamber of Commerce. GST-Related Crime Not Very Serious, but Needs to be Addressed Nonetheless Canada s business leaders do believe that GST crime takes place and ought to be addressed but few think that it is rampant and very serious while a sizeable minority believe that its frequency and seriousness are exaggerated. Half of Canada s business leaders (50) feel GST-related crime does take place and should be addressed, as shown in table 1. Approximately a quarter of respondents (27) believe the crimes take place, but that their frequency and seriousness are exaggerated (table 1). Only 11 think that GST-related crime has become rampant and is very serious (table1). Table 1: As you may know, there have been some allegations of crime involving the GST. Some merchandisers have been accused of collecting GST and not paying it to the government while others have been accused of collecting GST rebates on fictitious sales. Which of the following opinions is closest to your own? GST-related crime has become rampant and is very serious GST-related crime does take place and should be addressed GST-related crime does take place but its frequency and seriousness are exaggerated DNK/Refused

3 Business Leaders Somewhat Charitable about GST Criminals In a possible reflection of continuing public dismay about the GST as a tax, Canadian business leaders take a somewhat charitable view of GST criminals. They take this sanguine view despite recent press assertions of millions, if not billions, of dollars of GST repayments received fraudulently by crime-based enterprises. In practice, approximately a third (37) of Canada s business leaders consider an appropriate punishment for GST fraud to be no jail time but full repayment plus a hefty fine, as shown in table 2. About a quarter (24) of respondents believe less than a year in jail with full repayment to be adequate, and 17 think that 2-5 years in jail with full repayment would be suitable (table 2). The table also outlines other less popular punishment options. When asked what the accused s jail term should be for those individuals who have no means of repaying the government, 29 of respondents said they did not know, as shown in table 3. Twenty-eight percent of respondents said up to 12 months in jail and another 28 said 2-5 years in jail, as outlined in table 3. Only 16 of business leaders think 5-10 years in jail would be appropriate (table 3). Table 2: In your opinion, what should the fine and/or prison term be for GST fraud? No jail time but full repayment plus a hefty fine 37 Up to 12 months in jail and pay back full amount years in jail and pay back full amount years in jail and pay back full amount 4 Depends on the severity of the crime 5 Follow existing fraud statutes 2 Other 4 DNK/Refused 8 2

4 Table 3: If the accused does not have access to the stolen money or any other means of paying it back, what should his/her jail term be? Up to 12 months in jail years in jail years in jail 16 DNK/Refused 29 CEOs and Business Leaders Divided on Reforming GST System In the wake of reports of much GST crime, business leaders were asked for their thoughts on what should be done. No consensus emerges. As shown in table 4, business leaders were asked to rate their level of agreement with a series of opinions regarding the current GST system using a 7-point scale. Respondents neither agree nor disagree with the statements, it is time for the GST system to be revamped and the government needs to do more auditing (table 4). Slightly more business leaders disagree with the opinion that GST rebate forms need to be more detailed and thorough than those who agree (table 4). Respondents had the following to add on the GST system and its handling of crime: GST fraud is a crime and there should be very specific and sharp consequences when that crime is committed. If left unchecked, it's a problem that could cost taxpayers extensively. There should be a double-check when applicants apply for a GST number to prove they are a legitimate company. Obtaining a business number may be easy, but when businesses want the RT portion activated (GST number) they should provide additional information. Remittance/refund forms should also be more detailed with respect to exported sales, and known areas of fraud (i.e. auto exports) should be audited more frequently. The GST is based on the honour system. It is up to a corporation or individual to report his/her figures accurately. The only measure that can be used to control payments or claims is auditing. 3

5 Table 4: How much do you agree with the following opinions about the current GST system? Please use a 7-point scale where 7 means strongly agree and 1, the opposite. [ROTATE] It is time for the GST system to be revamped The government needs to do more auditing GST rebate forms need to be more detailed and thorough Mean DNK Methodology The National Post/COMPAS web-survey of CEOs and leaders of small, medium, and large corporations and among executives of the local and national Chambers of Commerce was conducted November 26-28, Respondents constitute an essentially hand-picked panel. Because medium and small companies are more numerous in the economy and hence among Chamber membership, the actual respondents in this consultative panel are drawn more from these strata than from the stratum of the largest companies. Because of the small population of CEOs and business leaders from which the sample was drawn, the study can be considered more accurate than comparably sized general public studies. In studies of the general public, surveys of n=171 are deemed accurate to within approximately 8 percentage points 19 times out of 20. The principal and coinvestigators on this study are Conrad Winn, Ph.D. and Jennifer McLeod. 4