Highlights of the Year

Taxpayer Fairness and Service Code¹

The ministry introduced the Taxpayer Fairness and Service Code in December 2004. The Taxpayer Fairness and Service Code was developed in partnership with business organizations² from across British Columbia, to describe the fairness and service principles that the ministry follows in dealing with its customers. It formalizes and communicates the ministry's commitment to partnerships, high quality service, improving the way the ministry interacts with customers, and streamlining and simplifying its business processes.

Beginning in the summer of 2005, the ministry will work with partner organizations to develop service standards for customer transactions with the ministry. The service standards will let customers know what to expect from the ministry when interacting with staff (for example, the turn around times for certain customer transactions, such as processing all business registrations within two days). The ministry will measure how well it is meeting these standards and will publicly report on the results.

Customer Information Sessions

The ministry continues to focus on providing complete, clear, accurate and timely information to assist customers to better understand and meet their financial obligations to government. A new ministry initiative in 2004/05 saw the provision of public information seminars on the application and administration of tax statutes, and the responsibilities of taxpayers.

• The ministry collaborated with the Canada Revenue Agency to provide monthly GST/PST information seminars, educational events for tax practitioners, and provided information at several convention and trade shows including the Investment and Franchise Show in Vancouver and the BC Home and Garden Show.
• Forty-two "PST and You" seminars were conducted in various centres in northern British Columbia, the Cariboo Chilcotin Coast Region, and Vancouver Island. The seminars provide information on the application and administration of the Social Service Tax Act. Over 1,100 registered vendors and individuals attended these seminars to increase their awareness of their responsibilities under the Act. The ministry will provide these seminars in other centres across British Columbia.
• The ministry held meetings with business associations including Retail BC, the Canadian Federation of Independent Business and chambers of commerce to determine their information requirements to improve and simplify the administration of social service tax for their specific industries.
• The ministry worked with the oil and gas industry to ensure that contractors and suppliers from outside the province are aware of their tax obligations to British Columbia.
• The ministry conducted five workshops with staff representatives from 69 municipalities in six locations across the province to provide information on school tax and the Home Owner Grant Program. As a result of these workshops, staff within these local governments will be better able to respond to queries and requests for information from taxpayers.

High School Education Learning Unit

The Ministry of Provincial Revenue represented British Columbia on the National Underground Economy Working Group, in conjunction with the Canada Revenue Agency (CRA) and in cooperation with several other provinces. Together, a pilot project was developed to increase awareness among junior and senior high school students about Canada's taxation system and their responsibility to pay taxes. The learning unit, titled "Responsible Citizenship and Canada's Tax System" explores why governments tax, what tax revenues are used for, and the consequences of participating in the underground economy and not paying taxes. The learning unit was first piloted in the spring 2004 semester at a French school in the lower mainland, with very positive results. To date, the unit has been provided to five English school districts and one French school district in the province. The ministry is now working on plans to make this learning unit available as part of the permanent provincial high school curriculum. In November 2004, the ministry received a Canada Revenue Agency Award of Excellence for its partnership in developing this project.

Appeals Administration Project

In July 2004, the ministry launched a project to reduce the existing backlog of tax appeals and the average age of outstanding appeals. Additional resources were committed to the appeals management process and streamlined work processes were implemented to address the backlog.

The project resulted in the resolution of 1,215 appeals during the fiscal year, four times the 303 appeals resolved in 2003/04 and almost three times the 449 appeals resolved in 2002/03. This resulted in the average age of outstanding appeals declining from 10.98 months in 2003/04 to 5.16 months as of March 31, 2005. The result — taxpayers will receive more timely appeal decisions and related explanations.

Revenue Management Project³

In November 2004, the ministry entered into an alliance with EDS Advanced Solutions, Inc. (EAS), a British Columbia based, wholly owned subsidiary of EDS Canada, Inc., to improve and streamline business processes and information technology systems. The goal is to transform and consolidate over 40 non-tax revenue management systems across government into a new revenue management system.

This alliance allows the ministry to leverage private sector expertise, technology and investment capital to improve a wide range of government revenue management processes including account management, billing, payment and remittance processing, and debt collection. The revenue management system will streamline the way government collects revenue and improve service to customers. Improved revenue recovery will reduce bad debt expenses and lower borrowing costs to government. This will generate significant financial benefits that can be put towards priority programs for British Columbians while transferring much of the risk to the private sector vendor.

British Columbian's privacy protection is paramount to government. The contract with EAS incorporates rigorous privacy, confidentiality and contractual security provisions that meet and exceed the standards of British Columbia's Freedom of Information and Protection of Privacy Act.

International Financial Activity Act

First announced in Budget 2004, the International Financial Activity Act (IFA) was proclaimed in May 2004 to expand and replace the International Financial Business (Tax Refund) Act. The IFA provides a refund of provincial income tax to eligible corporations and individuals who carry on international financial activities in British Columbia.

The ministry, working with the Ministries of Finance, Small Business and Economic Development and the Attorney-General, developed the new legislation following extensive industry consultation. The Act expands the types of corporations that are eligible for a tax refund, the list of financial activities that qualify for corporate income tax refunds, and expands the program to the entire province. This legislation sets the stage for renewed growth in the international financial business sector in the province and supports the government's commitment to make British Columbia an attractive place for business to invest.

Revenue and Accounts Receivable Collection Results

The ministry provides a central service to the Province for revenue and debt administration and collection. In 2004/05, the ministry administered $18.4 billion in revenue, or approximately 56 per cent of all revenue received by the Province. Of this revenue, over 97 per cent was identified by the ministry or self-assessed by individuals and businesses without compliance intervention.

The ministry achieved $330.7 million in incremental revenue in 2004/05, exceeding the forecast of $240 million. Incremental revenue is realized primarily as a result of ministry compliance activities. The ministry's audit and review program performed over 187,000 audits during the year.

The ministry also manages approximately $925 million in tax and non-tax receivables representing approximately 473,000 accounts. Receivables have decreased by $60 million since March 31, 2004.

The ministry exceeded its annual debt collections forecast in 2004/05 recovering $337.5 million compared to its forecast of $298 million. The tax and forest revenue collections portion totalled $235.4 million, while non-tax collections were $102.1 million, including a record $27.5 million recovered through the Canada Revenue Agency set-off program.

Employee Learning and Development

The ministry is committed to employee learning and development through a culture supporting excellence, continuous business improvement and quality customer service. This commitment will support the ministry in achieving its goals, while promoting employee morale, development and retention. The ministry has demonstrated its commitment to training through an increase in training expenditures from an average of $376/FTE to $546/FTE over the past three years. A new initiative of the ministry is a partnership with Camosun College to develop and deliver the Revenue Administration Certificate Program. This is an accredited, two and a half year certificate program focusing on tax administration in British Columbia. This program will create employees with a broad knowledge of all aspects of the ministry's operations.