1. Canada’s Tax System

2. Six characteristics of a tax system
Who pays the tax
The tax base
The rates to be applied to the base
General exemptions
General deductions
Other measures, such as how tax is to be paid
These determine how much revenue is produced, how fair the tax system is, and its ability to produce economic growth.

3. Based on the principle of self-assessment
Tax payers complete their tax return every year to report their income and calculate whether they owe tax or if they receivee a refund
It is the most economical and efficient way to collect tax.

4. Tax Payers bill of rights
Why do you think the CRA felt the need to publish these rights?
Would you add anything to this list?

5. Types of taxes
GST/HST
GST – 5% tax that applies to most goodsand services in Canada
There are two taxes, the GST (Goods and Services Tax) & PST (Provincial Sales Tax)
In NL and some other provinces, these are combined into HST (harmonized sales tax)

6. Direct vs indirect taxation
Direct taxes are paid by the taxpayer directly to the government.
Indirect taxes are paid by the taxpayer to a third party (such as a retail store) who remits the tax to the government.

7. Direct and indirect taxation
Which are these?
Income tax: a tax levied on the income of individuals, corporations, and trusts.
Tobacco tax: a tax applied to the sale of cigarettes, cigars, and other tobacco products
GST/HST: a tax on the supply of products and services
Property tax: a tax levied on the value of a property

8. Kinds of taxes
Proportional/flat taxes – applied at a constant rate regardless of income level and type.
Progressive income tax – individuals pay a larger percentage of tax as their income increases.
Regressive income tax – individuals pay a decreasing percentage of income in tax as their income increases. A sales tax is considered regressive since high income earners pay a smaller part of their income in tax than middle income earners.

9. GST/HST Credit You can apply for this credit, if:
You are at least 19 years of age or older
You have (or previously had) a spouse or common law partner; or
You are (or previously were) a parent and live 9or previously lived) with your child.
Paid out every quarter (January, April, July, October)

10. T4 Slips Statement of remuneration paid Completed by the employer
Employers have to release these slips by the end of February for each tax year