Archive for November, 2002

New laws to keep your private life private

Monday, November 25th, 2002

Sun

Criminals find GST credit an easy mark for fraud

Tuesday, November 19th, 2002

Sun

TORONTO (CBC) — A fraud involving the GST is costing Canadian taxpayers millions of dollars a year, a CBC News investigation has found.

The swindlers are targeting the GST input refund, which pays a seven per cent refund on sales to foreign countries.

The refund was meant to keep Canadian companies competitive in the international marketplace, but because the government doesn’t usually check on the validity on the claims, the refund is an easy mark for criminals.

In the scam, phony companies are set up and bogus exports, usually to the United States, are claimed to the government. The government automatically reimburses the companies for seven per cent of the amount claimed for exports abroad.

Because cars are big-ticket items, auto dealerships are often used in this sort of scam.

CBC News contacted a man convicted in 1999 of defrauding the government of $400,000 in just six months. He agreed to talk about his case on condition that he not be identified.

“You get an input tax credit form every month, you fill in how much GST you’ve actually paid out in products. You then send it in to the government and the government sends you back a refund cheque,” said the source.

University of Victoria economist David Giles, who specializes in Canada’s underground economy, said the take for these scams has been enormous ever since the GST was introduced.

“A figure of a billion dollars for this sort of activity is more than reasonable,” said Giles.

Giles said it’s almost impossible to track and reclaim that money once the cheques have been cashed, because the funds are kept offshore or the people involved declare bankruptcy.

“In many cases, even when people are taken to court, it’s not even possible to really ascertain how much money was lost in the first place. Recovering the money at a later date is both very expensive and almost impossible,” said Giles.

On Tuesday, a court case begins in Milton, Ont. involving seven people in Oakville accused of cheating the government out of $25 million in false refunds.

The arrests were the result of a ten-month investigation into phony car deals and paper companies that received GST refund cheques from the government.

BC Income Tax Info & Tax Tips

Saturday, November 16th, 2002

Sun

Download Document

Arbutus Corridor

Tuesday, November 12th, 2002

Sun

Fund redemptions hit $1.25-billion

Monday, November 4th, 2002

ROMA LUCIW
Sun

Canadians yanked $1.25-billion out of mutual funds in October, the seventh consecutive month that the fund industry has seen more money exiting than coming in.

The loss comes despite a rebound in North American stock markets. According to preliminary figures provided by the Investment Funds Institute of Canada, net redemptions for the month of October are between $1.1-billion and $1.4-billion.

In September, the worst month for mutual funds in at least a decade, investors yanked $1.1-billion from mutual funds, with $800-million of that figure coming from stock funds.

In September, fears of a war between the United States and Iraq as well as soft U.S. economic news trashed investor sentiment and sent North American stocks plunging to multi-year lows.

October proved to be a better month for the indexes and the severe losses abated. During that month, the Dow Jones industrial average – a gauge of 30 U.S. stocks – rose 10.6 per cent, its second-best performance ever.

Canada’s benchmark index also rose, although much more modestly. The S&P/TSX composite index added 1.1 per cent.

Although softer-than-hoped-for U.S. economic news continues to pour in and a war between the U.S. and Iraq remains on the horizon, investors were determined to push beaten-down stocks higher in October.

RBC Funds Inc. suffered the biggest blow that month, with net redemptions of $428-million. AGF Management Ltd. was not far behind, logging a loss of $255-million.

Fidelity Investments reported net redemptions of $158-million, Investors Group lost $110-million and BMO Funds dropped $112-million.