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News releaseRevenue Minister announces structure of mandatory Contract Payment Reporting SystemOTTAWA, December 15, 1998 The Honourable Herb Dhaliwal, Minister of National Revenue and M.P. (Vancouver South-Burnaby), today announced the structure of the mandatory Contract Payment Reporting System for the construction industry. As part of the federal government's efforts to promote compliance and to combat underground economic activity in the construction industry, a mandatory contract payment reporting system was announced in the February 24, 1998, budget by the Honourable Paul Martin, Minister of Finance. At that time, Revenue Canada made a commitment to consult with the industry to determine the most effective approach for reporting payments to subcontractors. "The idea behind introducing the Contract Payment Reporting System is to increase compliance with Canada's tax laws and ensure a level playing field for business while minimizing any additional administrative costs to the industry," explained Mr. Dhaliwal. "We are particularly sensitive to the concerns of small- and medium-sized business and, I believe, have addressed key industry concerns through the consultation process." As a result of these discussions, provisions contained in the mandatory Contract Payment Reporting System will include:
Beginning January 1, 1999, businesses whose principal activity is construction must ensure they are keeping the name, address, amount paid, and goods and services tax (GST) registration number or Business Number of their subcontractors. This information will be reported by March 31, 2000. Based on construction industry recommendations, the Department will look at expanding the reporting requirement to other sectors that provide home renovation services. Discussions will begin immediately. The Contract Payment Reporting System complements Revenue Canada's existing compliance strategy and addresses a significant part of the underground economy. It offers an effective response to the industry's concerns over underground economic activity in the construction sector. "The underground economy hurts us all. Tax evasion compromises the ability of the federal and provincial governments to provide essential services. It leads to unfair competition and places an unfair tax burden on honest taxpayers," concluded Mr. Dhaliwal. - 30 - For more information on the Contract Payment Reporting System, visit Revenue Canada's Internet site at: www.rc.gc.ca/contract/ For media information, contact Michel ClérouxRevenue Canada (613) 957-3522 Office of the Minister |
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