March 19, 1948 (20th Parliament, 4th Session)


James Joseph McCann (Minister of National Revenue)


Hon. J. J. McCANN (Minister of National Revenue):

Mr. Speaker, some days ago I promised to make a statement with reference to farmers' income tax returns, and I am now ready to implement that promise. Further consideration has been given to the matter concerning the net worth statement set out in the 1947 T.l prairie farmers and farmers' income tax returns.
I cannot emphasize too strongly that it is in the farmer's own interest as a citizen and taxpayer to provide accurate and complete information of his activities so that he can be dealt with in the same way as every other taxpayer in the country.

The department has placed in the hands of the farmer guide books which should prove of great value in maintaining proper information as to the operation of his farming business, and therefore should be of great help to him in completing his tax return. It will be beneficial to the farmer if he will carefully read the book and the form and attempt to complete it in its entirety.
It has been. the experience of the department that many farmers reporting income do not maintain book-keeping records of their affairs. Our assessors have found in innumerable instances that, to determine the taxable income of the average farmer, it has been necessary to prepare, with the farmer's assistance, of course, a statement of the farmer's net worth and therefrom to calculate or estimate the taxable income.
To assist the farmer and to facilitate the assessing, the 1947 form was evolved, and included with it on page 5 is a statement of net worth. It was proposed that the farmer would complete this statement at the time he completed the return and that the department's assessors would then be in a position to proceed to the determination of the taxable income expeditiously and, in a great many oases, without further reference to the farmer.
It is now represented that this statement of net worth is too complex and that the average farmer will find it impossible to complete it without assistance. It would be impossible, except at a great cost, to build up the staff of the department to enable officials to call on every farmer in Canada for the purpose of assisting in the preparation of income tax returns.
The department therefore has decided that
(a) those farmers who report their income for 1947 on a cash basis need not complete the farmer's net worth statement section of the return. There may be individual cases where, after the filing of the return, the department will require from a farmer, as from any other taxpayer, in order to make a proper assessment of his income, a statement of assets and liabilities of his business, or other additional information which, in such cases, will be requested in the usual manner.
(b) Those farmers who report 1947 incomes on an accrual basis must attach to the return a statement of assets and liabilities, as heretofore, or complete the appropriate parts of the net worth statement attached to the return.
Objections have been raised with reference to net worth statement for fishermen. The adjustment of this matter is being given consideration.

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