ENSURING FISCAL EQUITY: WEALTH INDICATORS Innovation Increased cost effectiveness Overall effectiveness

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1 Innovation Increased cost effectiveness Overall effectiveness The Honourable Francine Martel-Vaillancourt Deputy Minister of Revenue 2010 United Nations Public Service Awards United Nations Public Service Day, Awards Ceremony and Forum in Barcelona, June 22, 2010

2 Revenu Québec at a Glance Nearly 6,000,000 taxpayers and 600,000 businesses 1 service outlet in Toronto 13 cities in Québec 17 service outlets and 1 client services support centre Nearly 10,500 employees Responsible, in whole or in part, for the administration of 20 laws Collects 85% of the Québec government s own-source revenue

3 Revenu Québec s Mission Mission To collect income tax and consumption taxes Objectives To encourage self-assessment To protect the tax base Balance Difficulty Countering tax evasion Measures Integrity of the tax system Fairness among taxpayers The ultimate goal of the wealth indicators project To change taxpayers future conduct for the better

4 Vision of the Project Reported income Wealth indicators Auditor Land Automobile House Boat Aircraft Investments Immovables Cost of living Available income Personal enrichment = (Difference)

5 Innovative Audit Method Because of the audit method developed as part of the project, the number of audits conducted has been significantly increased (by approximately 4,000 a year); auditors are provided with a rigorous, greatly simplified process for combatting tax evasion; audits can be conducted at our offices rather than at a taxpayer s place of business;

6 Innovative Audit Method (continued) communication between Revenu Québec and its clientele has been simplified, in particular, by the production of files that are more comprehensive and more easily understood by taxpayers; the time required to complete an audit has been reduced from 200 to 21 hours; and the cost of an audit has been reduced from $8,500 to $900.

7 ENSURING FISCAL EQUITY: WEALTH INDICATORS Significant Additional Revenue Cumulative additional revenue : $220 million Projection for 2003 to 2011: $260 million Millions of dollars

8 Tangible Results Net benefit of the wealth indicators project Additional revenue Minus Cost of carrying out the project (investment recouped after only 2 months of operation) Operating cost over 7 years (auditors salaries and other costs) $220 million $5 million $32 million Net benefit Net benefit of $183 million from 2003 to 2009 redistributed by the government in the form of services provided to the population $183 million

9 Stakeholders Québec government Ministère des Finances Commission d accès à l information Government departments, public bodies and the private sector Population of Québec (for the purposes of gaining their support and maintaining their confidence)

10 Formidable Challenges To realize this project, Revenu Québec had to have the Act respecting the Ministère du Revenu amended; obtain the consent of the Commission d accès à l information for the use of external information; check the accuracy of the results obtained through data linkage so that they can be filed as evidence before the courts, where relevant; conclude a large number of memoranda of understanding with the partners of Revenu Québec to obtain information from them; and develop a highly complex technology.

11 Innovative Expert System

12 Future Outlook Based on respect, transparency and thoroughness, this project for identifying tax evasion (the only one of its kind in the world) has paved the way for technologies that revolutionize the tax audit methods of governments; is inspiring a number of countries to implement such technology in their government administration; and has unquestionably set Revenu Québec apart as a worldwide leader in combatting tax evasion. Government of Canada British Columbia Australia France Ontario

13 Lessons Learned This project has demonstrated the importance of the commitment of the government and its various departments; the support of the population; respecting privacy; a clear vision and a structured approach; investing in new technologies; and reviewing how things are done.

14 Distinctions and Awards 2010 United Nations Public Service Award in the category of Improving the delivery of services Europe and North America Gold Winner in the Innovative Management category, Institute of Public Administration of Canada Prix d excellence in the public service category, Institut d administration publique de Québec OCTAS de l Excellence, Fédération de l informatique du Québec OCTAS in the "technological innovation (1,000 employees or more)" category, Fédération de l informatique du Québec

15 Thank you for your attention. Congratulations to all the winners!