When you tell people about the tax and how to file a tax return, it often raises some basic questions about the nature of the taxes and how the money is spent. Taxes and taxes are amounts that we are required to pay to the government, which uses them to fund various social programs, operating expenses and debt.
The types of taxes collected in Canada
In Canada, the federal, provincial and municipal governments levy taxes on income from wages and taxes on the consumption of goods and services, real estate and goods that cross borders. If you are employed in Canada, there is a withholding tax on your salary income. You also pay a sales tax on the items or services you buy. With the use of the T1135 forms the deals come perfect now.
Sales taxes are automatically added to your bill when you buy something and your employer deducts your tax directly from your pay. At the end of the year, you file a tax return with the Canada Revenue Agency (CRA) to make sure you have paid the right amount of tax. If you have paid too little, you owe money to the CRA, but if you have paid too much money, you will receive a refund.
Just like employees, business owners, retirees and investors must file a tax return to account for their business, pension and investment income. Every quarter, businesses that collect the goods and services tax or pay the payroll tax pay the money back to the CRA and fill out forms to ensure that they pay the correct amounts.
The CRA uses the forms submitted by businesses and tax returns to ensure that the correct amounts of tax have been collected. CRA also conducts audits of businesses and taxpayers to ensure that no tax liability is missed.
Tax at the service of the population
Since 2013, almost half of the tax and taxes are reinvested in services to the population. These expenditures fund social programs for children and seniors, health care, education and international assistance.
Nearly one in five dollars of tax collected by the federal government is transferred to provincial governments. Provinces use these funds to fund post-secondary education, health care and children’s programs. Canada also supports seniors to whom tax revenues are redistributed through Old Age Security, Income Supplement and Spouse’s Allowance payments.
The government uses tax money to fund employment insurance and child social programs such as the child care benefit, the child tax benefit and the GST credits for families with children. Some of the tax revenue is also for farmers, aboriginals and first nations, as well as for research. International assistance equals two cents for every dollar of tax invested.
Tax to fund government operations
Government operating costs consume just under a third of tax revenue. The equivalent of eight cents for every dollar is spent on defense while the amount for firefighters, police and border security and public safety programs is four cents per dollar. The CRA’s operating costs are three cents per dollar.
Tax to pay off the debt
A portion of the tax collected finances the debt. If you hold federal bonds or treasury bills, you are one of the government’s creditors. When you cash in those securities, the government uses tax revenues to pay you.