| |||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||
 |
| ||||||||||||||||||||||||||||||||||||
 |
|||||||||||||||||||||||||||||||||||||
|
Vol. 139, No. 52 — December 24, 2005 Interest Rates (Excise Tax Act) RegulationsStatutory authority Excise Tax Act Sponsoring department Department of Finance
REGULATORY IMPACT (This statement is not part of the Regulations.) Description The Excise Tax Act (the "Act") imposes excise taxes on premiums in respect of insurance effected outside Canada (Part I of the Act), as well as on gasoline, aviation gasoline, diesel, aviation fuel, jewellery, automobile air conditioners and heavy automobiles (Part III of the Act). Where a person fails to pay a tax imposed under the Act to the Receiver General as and when required (or where the Minister of National Revenue owes an amount to a person), compound interest is payable at the "prescribed rate" in order to maintain the time-value of the amount owed. In the federal budget tabled in the House of Commons on February 18, 2003, the Government of Canada proposed to begin the implementation of Standardized Accounting (an initiative aimed at simplifying tax compliance by businesses) by harmonizing, among others, provisions concerning the amount of interest and penalties payable on amounts owing under the Act (non-GST) and the Income Tax Act (the "ITA"). There were then two fundamental differences between the interest and penalty provisions of these Acts: — The Act imposed a 0.5% penalty per month on amounts owed by a person to Her Majesty under Part III of the Act (and a 5% penalty in the case of amounts owed by a person to Her Majesty under Part I of the Act) while, in similar circumstances, the ITA imposes none; and — Compared to the Act, the prescribed interest rate of the ITA was 4% higher in the case of amounts owed by a person to Her Majesty, and 2% higher in the case of amounts owed by the Crown to a person. The Budget Implementation Act, 2003, which received Royal Assent on May 27, 2003, repealed penalties payable on amounts owed by a person to Her Majesty under the Act (non-GST), effective July 1, 2003, thereby harmonizing the penalty provisions of the Act with those of the ITA. The proposed Interest Rates (Excise Tax Act) Regulations (the "Regulations") complement the legislative changes in the Budget Implementation Act, 2003 and are necessary to harmonize the prescribed rates of interest. Under the Regulations, the rate of interest is established quarterly and is the simple arithmetic mean, expressed as a percentage per year and rounded to the next whole percentage, of all amounts, each of which is the average equivalent yield, expressed as a percentage per year, of the Government of Canada Treasury Bills that mature approximately three months after their date of issue and were sold at auctions of Government of Canada Treasury Bills during the first month of the preceding quarter, plus 4% in the case of amounts owed to Her Majesty, or plus 2% in the case of amounts payable by the Minister. These rates are deemed to have come into force on July 1, 2003. The Regulations do not change the rate of interest on amounts owing under Part IX of the Act (GST/HST). Alternatives No alternatives to the Regulations were considered since legislation specifically provides for the rate of interest to be prescribed by regulation. Benefits and costs Harmonizing prescribed interest rates with those of the ITA will simplify tax compliance by businesses. Strategic environmental assessment A strategic environmental assessment has been conducted and there are no important environmental effects associated with the Regulations. Consultation The proposed changes were announced in the federal budget tabled in the House of Commons on February 18, 2003. No written submissions or comments were received with respect to the proposed change in the prescribed rate of interest of the Act. Compliance and enforcement The Act provides the necessary compliance and enforcement mechanisms for these Regulations. The Canada Customs and Revenue Agency is responsible for the administration and enforcement of the Act. Geoffrey Trueman, Chief, Air Travellers Security Charge, Sales Tax Division, Tax Policy Branch, Department of Finance, L'Esplanade Laurier, East Tower, 16th Floor, 140 O'Connor Street, Ottawa, Ontario K1A 0G5, (613) 992-4384 (telephone), (613) 995-8970 (fax). Notice is hereby given that the Governor in Council, pursuant to subsections 59(3.1) (see footnote a) and (3.4) (see footnote b) and section 277 (see footnote c) of the Excise Tax Act, proposes to make the annexed Interest Rates (Excise Tax Act) Regulations. Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Geoffrey Trueman, Chief, Air Travellers Security Charge, Sales Tax Division, Tax Policy Branch, Department of Finance, L'Esplanade Laurier, 16th floor, East Tower, 140 O'Connor Street, Ottawa, Ontario, K1A 0G5. Persons making representations should identify any of those representations where the disclosure of which should be refused under the Access to Information Act (see footnote d), in particular under sections 19 and 20 of that Act, and should indicate the reasons why and the period during which the representations should not be disclosed. They should also identify any representations for which there is consent to disclosure for the purposes of that Act. Ottawa, December 6, 2005
DIANE LABELLE
R.S., c. 15 (1st Supp.), s. 23(2) S.C. 2003, c. 15, s. 96 S.C. 1993, c. 27, s. 125 R.S., c. A-1 SOR/91-19 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
NOTICE:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
