From: AlanBaggett@volcanomail.com   
      
   CRA includes usury in its bag of abusive tricks :CRA SOTW    
      
   CRA includes usury in its bag of abusive tricks   
   Don Cayo, Vancouver Sun   
      
      
   Two car loan companies I wrote about last month threaten interest rates of up   
   to one per cent a day in agreements with poor schmucks who borrow from them,   
   but both say they don't actually try to collect that much.   
      
   Indeed, one company admits the contract isn't enforceable (although, as I have   
   noted, the Criminal Code forbids not only collecting interest over 60 per cent   
   a year, but also putting it in a contract).   
      
   So if even high-cost lending companies don't have the gall to try to gouge   
   customers this badly, guess who does? Who actually squeezes one per cent a day   
   -- more than six times the Criminal Code maximum -- out of unfortunate debtors?   
      
   None other than Canada Revenue Agency. It is thumbing its nose at fairness and   
   the law by nailing any employer who is late remitting tax money withheld from   
   employee pay with interest so high the rest of us would land in jail if we   
   tried to impose it on    
   people who owe us.   
      
   The CRA isn't usurious across-the-board, but it's website states explicitly   
   that for these late remittances the charge will be "3% if the amount is one to   
   three days late, 5% if it is four or five days late, 7% if it is six or seven   
   days late, and 10% if    
   it is more than seven days late."   
      
   CRA is also on thin ice with assessments for late income tax filers. If they   
   owe money, late filers must pay five per cent initially, plus one per cent for   
   each month until the return is filed. According to my math, this adds up to a   
   usurious interest    
   rate on filings that are one to 30 days late, although the rate falls below   
   the legal maximum for filings that are more than a month late.   
      
   Most governments assess hefty levies -- and so they should -- for chicanery or   
   playing deliberate games with the taxman. But these usurious rates aren't   
   aimed at law-breakers or game-players -- just people who pay late.   
      
   Indeed, the reader who told me about the issue was hit with one-per-cent-a-day   
   interest when, unbeknownst to him, CRA changed the due date for his   
   remittances. In a normal business relationship, this would result in a quiet   
   word, not punishment.   
      
   And if CRA wants these usurious rates to punish, then they aren't just   
   ethically appalling, they're also dumb. It works out to three per cent a day   
   for people who are just one day late, and just one per cent a day for people   
   who are three days late. And    
   it's capped at 10 per cent -- as I read CRA's information, if you're 100 days   
   late it costs only 10 per cent, or 0.1 per cent a day. So the incentive to pay   
   promptly diminishes the longer you're late.   
      
   This latest example of the kind of taxpayer abuse I've been writing about for   
   more than a year is right up there with the preposterous assumptions, the   
   arbitrary demands, the habit of penalizing taxpayers for CRA's own mistakes,   
   and more.   
      
   It reflects the uncaring mindset that produced a 10-per-cent fine -- now   
   rescinded since it drew scornful media attention -- for paying bills at a CRA   
   office rather than at a bank. The attitude seems to be that if people   
   inconvenience the bureaucracy, no    
   matter how innocently or trivially, they'll be hit with a bazooka.   
      
   But the point is that parliamentarians who enacted the Criminal Code thought   
   charging such high rates is an act so vile that people who do it belong in   
   jail. And now a branch of government is defying the spirit, if not the letter,   
   of that law.   
      
   As they say in Parliament, too often with cause: Shame, shame!   
      
   dcayo@vancouversun.com   
   (c) The Vancouver Sun    
      
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