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Processing Methodology of Tax Data at Statistics Canada

Processing Methodology of Tax Data at Statistics Canada. Authors: François Brisebois, Richard Laroche and Rossana Manriquez (Statistics Canada) Presenter: Danielle Laroche (Statistics Canada). May 2011. Outline. Tax data at Statistics Canada Processing of tax data

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Processing Methodology of Tax Data at Statistics Canada

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  1. Processing Methodology of Tax Data at Statistics Canada Authors: François Brisebois, Richard Laroche and Rossana Manriquez (Statistics Canada) Presenter: Danielle Laroche (Statistics Canada) May 2011

  2. Outline • Tax data at Statistics Canada • Processing of tax data • Define each source presented • Overview of processing steps • Current challenges Statistics Canada • Statistique Canada

  3. Tax Data at Statistics Canada StatCan has access to all tax data through a signed agreement with the Canada Revenue Agency (CRA) Used in several surveys Primary use: as a direct replacement for collected units (or through a model) Secondary use: auxiliary information used for the purpose of survey design, E&I, data confrontation, etc. Statistics Canada • Statistique Canada 2020-01-04 3

  4. Tax Data at Statistics Canada Three sources discussed: Business tax Two sources: T1 form, T2 form Annual data Individual consumption tax Goods and Services Tax (GST) Monthly data Focus of the paper is on the processing of these three sources Statistics Canada • Statistique Canada 2020-01-04 4

  5. Processing of Tax Data At the CRA Only minimal editing is performed for the context of statistical use At Statistics Canada Centralized processing (in the Tax Data Division) Thorough process Ultimate products: tax data files made available to survey programs Statistics Canada • Statistique Canada 2020-01-04 5

  6. T1 – Definition The T1 form is the main form filled out annually by all Canadians to report their income tax Business surveys are interested in income earned from self-employment (unincorporated businesses) Farming, Fishing, Rental, Professional, Commission, Business 85% are filled out electronically (available); the remaining 15% are reported on paper (not available) Statistics Canada • Statistique Canada 2020-01-04 6

  7. T1 – Processing Two files Assessed Record File: two variables for everyone Used as a starting point for the imputation of detailed variables not available for non-electronic filers “T1 data”: detailed variables for electronic reports only Identification of partnerships Balancing edits Imputation of missing records Derived variables (using standardized financial statements) Statistics Canada • Statistique Canada 2020-01-04 7

  8. T2 – Definition Corporate tax returns Filled out annually Flexible reporting period Only 8 fields are mandatory, but many others are of interest to StatCan survey programs Statistics Canada • Statistique Canada 2020-01-04 8

  9. T2 – Processing Edits: balancing, invalid or inconsistent, outliers Imputation: deterministic, missing tax data Generic to detail allocation Block composed of one generic field and detail fields Goal is to allocate reported generic amounts to detail fields when it has not been done Groups of “detail respondents” are formed; their distribution is used to impute “generic respondents” Derived variables (standardized financial statements) Statistics Canada • Statistique Canada 2020-01-04 9

  10. T1 & T2 – Challenges Explore other sources to improve processing Reporting on data quality Variance due to imputation Harmonise the processing with the few remaining programs having their own system Statistics Canada • Statistique Canada 2020-01-04 10

  11. GST – Definition Tax levied on final consumption of products and services (VAT) Collected and remitted by businesses with revenues over $30K Remitting frequency depends on business size Two main variables: Sales Tax collected Statistics Canada • Statistique Canada 2020-01-04 11

  12. GST – Processing Monthly file sent from CRA, 7 weeks after reference month Complex steps: E&I Missing, inconsistencies, outliers Calendarization Break non-monthly transactions into monthly values, taking into account seasonal patterns Allocation From high-level reporting units to detailed level units (from enterprise to establishment levels) Statistics Canada • Statistique Canada 2020-01-04 12

  13. GST – Challenges Complexities from the fact that (recent) historical data are reprocessed every month Only 70% of the expected data are received on time Annual and quarterly remitters are “extrapolated” until reported data are received Fine-tuning the methodology Statistics Canada • Statistique Canada 2020-01-04 13

  14. Conclusion Centralizing and enhancing the processing methodology has increased tax data quality Which in turn has encouraged a greater use Increased use by survey programs, with strong support by management Possibility of using more tax data? Options are being examined in the context of a project to integrate business surveys Statistics Canada • Statistique Canada 2020-01-04 14

  15. Thank you • For more information,  Pour plus d’information, please contact the authors: veuillez contacter les auteurs: François Brisebois, francois.brisebois@statcan.gc.ca Richard Laroche, richard.laroche@statcan.gc.ca Rossana Manriquez, rossana.manriquez@statcan.gc.ca Statistics Canada • Statistique Canada

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