Indirect Measures - Quantity and Quality of CRA Services for taxpayers

Indirect measures evaluate the factors that have an indirect impact on the compliance burden. These measures can be divided into two broad categories: the complexity of the compliance process, and the quality of CRA services.

Measures in this section (indicators 3.1, 3.2, and 3.3) assess the impact that the complexity of the compliance process has in terms of the compliance burden on small business. The measures are divided into two aspects:

• examination of the error rate (in order to assess the understanding of legislated requirements).
• demonstration of the need for supplementary information, where applicable, to clarify legislative requirements.

The assumption is as follows: the more supplementary information needed to understand the compliance obligations, the more complex the legislated requirement.

• 3.1 - Taxpayer error rate

Definition

A proxy measure of the compliance burden due to the complexity of legislated requirements.

Benchmark

The total errors attributable to incorrectly filed returns (taxpayer errors) was 26.8% in 2006.

The error rate not affecting tax assessed was 19.0% in 2006.

Source

T1 Quality Evaluation Program: 2006 Processing Year

Analysis

The CRA reviews approximately 14,000 paper-based individual income tax returns (T1) annually.

The trend in non-taxable errors has been up over the past five years. The non-taxable errors include instances where the client neglected to disclose non-tax data, such as marital status and spousal identification, as well as errors in claims for deductions or credits that were not fully supported with the documentation required with paper-based returns. Among returns reviewed, 14.8% to 19% contained non-taxable errors.

It was noted that the growth of non-taxable filing errors by taxpayers coincides with the expansion of the return to collect additional information from taxpayers, such as the net income of their spouse. The additional information collected adds to the complexity of the compliance process requiring longer forms for completion and more time spent.

Common taxable filing errors were for non-allowable deductions and credits and when taxpayers neglected to claim amounts they were entitled to, such as union dues or the Registered Pension Plan contributions shown on their T4 slips.

Another source of taxable processing errors involved situations where the taxpayer included written correspondence within their return that was not taken into consideration during the assessment.

Filing errors attributable to taxpayers that directly impacted the refund or balance due were found in 7.8% of the sample reviewed in 2006^{[Footnote 1]}  with an impacted refund or balance due of $132 on average.

Taxable errors that could not be attributed to either taxpayers or to processing staff, on average, impacted the ‘refund or balance’ due by $120 (2.8%).

• 3.2 - Percentage of telephone enquiries by topic

Definition

An indirect measure of the compliance burden resulting from the complexity of legislated requirements. Information channel: Telephone.

Benchmark

Percentage of phone inquiries for GST/HST

• Account information: 11.09%
• Paying and remitting taxes: 8.04%

Percentage of phone inquiries for Business Number registration

• General information: 11.09%
• Registration: 7.35%

Source

CRA, Telephone Profile of Enquiries Study^{[Footnote 2]}  Fall Season (September to December)

Analysis

The percentage of telephone enquiries by topic is indicated in Figure 6. Note that comparisons are made with results of the 2005 and 2007 fall seasons.

The ten main topics, including the most important in terms of volume, make up the two main elements of the benchmark. The study revealed the following:

• GST/HST - Account information increased to 11.09% of the overall enquiries in 2007 compared to 4.70% in 2005. This shows a significant interest from businesses.
• GST/HST - Paying and remitting taxes shows an increase as well.
• GST/HST is a recurring element in the regulatory compliance process and the impact of its complexity on compliance is the result of several factors related to the nature of the information sought. Businesses call the CRA seeking information about payment methods, collection methods, invoicing and instalments, and exemptions.
• We are aware that the administration of the GST/HST can be complex (filing requirements, input tax credits, zero-rated or taxable goods, etc.). The relatively high volume of enquiries suggests that businesses and small businesses are still unsure of their obligations.
• Business Number registration is an important topic and one that generates among the greatest enquires.
• The Business Number registration process decreased more significantly to 7.35% in 2007 compared to 9.54% in 2005.
• In the short term, the telephone service provided by the CRA is one of the most effective ways to mitigate the complexity of tax regulations. To obtain an overall picture of our efforts to reduce the compliance burden, it is important to see this indicator in conjunction with several others, especially timeliness (1.2) and response rate (1.3).
• Note that business callers are broken down as follows for the 2007 survey: employer (12%), authorized representatives (28%), self-employed (19%), tax preparer (5%), corporation (23%), unknown (5%), and other (8%).
  • 3.3 - Percentage of Web page visits by topic

Definition

A proxy measure of the compliance burden due to the complexity of legislated requirements. Information channel: Web site.

Benchmark

83% of small businesses and 94% of intermediaries used the CRA business Web site to look for forms and publications.

Sources

CRA, Web Site Business User Survey

Analysis

The Figure 7 shows the most common Web pages accessed by small business representatives and intermediaries on the CRA Web site.

• The most popular Web pages accessed by both small business representatives and intermediaries, were form and publication searches.
• The Web site remains the most rapid and independent means of searching for forms and publications.
• It is interesting to note that intermediaries tend to use the Web site more in almost all instances except for GST/HST.
• There is a significant difference between small business representatives and intermediaries percentages for most Web pages accessed.

Indicators 4.1, through 4.4 aim to assess the service burden on small businesses. Facilitating compliance relies, in part, on the information that is available through the CRA's communication channels. Information about outreach activities, user perspectives on the clarity of information and services provided to them by the CRA, as well as the usability of the CRA Web site are discussed.

These indicators have data specific to small businesses and third parties. Data on third parties has been included because third parties represent added costs for small business owners which, in turn, adds to the compliance burden.

Indirect or proxy measures in this section use clients' perceptions, including those of small businesses, to assess the quantity and quality of CRA services and staff. While perceptions are not normally used as quantifiable measures, they are essential to this discussion because perceived burden is the reality for small businesses and the CRA must take that into account.

• 4.1 - User satisfaction with CRA services and staff

Definition

A measure of small business user satisfaction with CRA services and staff.

Benchmark

This benchmark includes satisfaction rates for the most frequently used service channels and for the CRA's telephone service agents.

Satisfaction with the CRA Web site

• 74% for small businesses.
• 80% for third parties.

Satisfaction with CRA telephone services

• 80% of CRA clients expressed satisfaction with the overall quality of telephone service.

Satisfaction with telephone service expertise

• 80% of CRA clients said the telephone agents are knowledgeable and competent.

Sources

CRA Web Site Business User Survey

CRA, Client Satisfaction Survey, Enquiries Telephone Line for Businesses and Self-Employed Individuals

Analysis

User satisfaction with CRA services and staff can be divided in three main categories: Web site business page, telephone services and satisfaction with the telephone service agents.

For this indicator, data pertaining to small business refers to the business owner or the employee responsible for performing the work required to comply with CRA requirements. Data pertaining to third parties refers to accountants, payroll service providers, tax preparation service providers, or other types of service providers.

Satisfaction with Web site business page

Table 7 shows overall satisfaction with the CRA Web site's business pages:

• 74% of small businesses and 80% of third-parties indicate overall satisfaction.
• 7% of small business representatives and 5% of third-party representatives expressed dissatisfaction with the CRA Web site.
  • Of those not satisfied, one of the main reasons for user dissatisfaction is the inability to find information on the Web site: 34% of small business users and third parties attributed their lack of success on the Web site to the fact that they could not find the information they needed.

Table 7: Small Business User Satisfaction With Web Site Business Pages

Business users were largely satisfied with their experience:

• 84% of small businesses and 89% of third parties agreed that the information on the site was up-to-date.
• 79% of the small businesses and 78% of the third parties responded that the site had all the information they needed.
• 76% of small businesses and 84% of third parties said the information was easy to understand.

Table 8 shows that small business representatives and third parties expressed a high level of satisfaction with specific Web site information and services. In both groups, satisfaction is highest for filing returns, subscribing to email services, and finding forms or guides.

With respect to services, most of the surveyed groups (small businesses and intermediaries) successfully used the Web site.

• 78% of small business users and 80% of intermediaries said they were able to find most or everything they were looking for or completed most or every task they tried to complete on the CRA site.
• The survey indicates that neither group was very likely to say they found or completed everything: 32% of the small business users said they completed tasks with success, compared with 15% for the intermediaries.
• 3% of small business users found none of what they needed or completed none of the tasks they intended to carry out on the site; none of the surveyed intermediaries had this problem.

Table 8: Satisfaction With Web Site Information and Services

Satisfaction with CRA telephone services

• According to the 2005 CRA Client Satisfaction Survey, Enquiries Telephone Line for Businesses and Self-Employed Individuals, 80% of respondents expressed satisfaction with the overall quality of services. In addition, Figure 8 shows that 43% said that they were very satisfied, 14% were neutral in their CRA assessment, and 6% expressed dissatisfaction. A total of 79% of business representatives, 86% of self-employed, and 68% of service providers were satisfied.
• 92% of those surveyed described the quality of service as meeting or exceeding their expectations.
• A total of 55% of respondents expressed satisfaction with their ability to get through to an agent without difficulty, and 54% of surveyed taxpayers were satisfied with the amount of time they had to wait to speak to an agent.

Satisfaction with CRA telephone agents

The CRA Client Satisfaction Survey, Enquiries Telephone Line for Businesses and Self-Employed Individuals measures client satisfaction with CRA telephone service employees. Most of the surveyed clients were satisfied with the performance of CRA agents:

• 87% of them agreed that the agents were courteous, while 85% of respondents agreed that they were treated fairly.
• 81% said they were confident that their privacy was protected, and 80% agreed that the agent was knowledgeable and competent.
• 78% of the clients noted that their questions were fully answered, and 76% of surveyed users said that their enquiries were resolved on first contact.

• 4.2 - Time spent on the CRA Web site

Definition

A measure of CRA's ability to simplify complex requirements and therefore to address the compliance burden.

Benchmark

14% of small businesses visited the CRA Web site more than 20 times in 2006.

Source

CRA, Web Site Business User Survey

Analysis

The benchmark for this indicator was chosen because it represents the highest number of visits made by small businesses specifically to the CRA Web site. Indicator 4.4 (later in this report) discusses outreach activities towards small businesses and demonstrates that they are less aware of the CRA Web site and its “My Business Account” services than third parties.

The greater frequency of visits by small businesses and third parties means more time is spent perusing the CRA Web site. While this may suggest that they are simply finding answers to a variety of questions in one or more visits, the language used in the CRA Web site may not be explicit enough for the users. Further investigation may be necessary to ensure that the information is clearly written. Two recommendations from the August 2008 CFIB report suggest a need for using simplified language in all CRA communications including our Web site.^{[Footnote 3]} 

Table 9 shows the number of visits that small business and third-party representatives made to the CRA Web site.

Table 9: Number of Visits to CRA Web Site for Business Purposes

Table 10 shows that small businesses tend to visit the Web site on a regular basis. While most of them (40%) visit it a few times a month, a large number (29%) visit it several times a week or more.

Table 10: Frequency of Visits to the CRA Web Site

Of the portion of small businesses using the CRA Web site, 84% use this service to obtain information, 3% use it only to conduct on-line transactions, and 13% use it for both purposes.^{[Footnote 4]} 

My Business Account

My Business Account which was launched in 2006, represents a significant improvement in service delivery, and achieves some of the recommendations of the CRA's Action Task Force on Small Business Issues to reduce red tape for small businesses.

My Business Account allows users to access a multitude of electronic services for businesses, with a single user ID and password.

• 4.3 - Accuracy and clarity of information provided by the CRA

Definition

An indirect measure of the value added by CRA intervention and of our ability to provide clients with accurate information that responds to their needs.

Benchmark

The benchmark includes the rate of accuracy and clarity of information provided by the CRA's Web site and telephone services.

• 82% of clients found that the information provided by CRA telephone services was clear.
• 81% of clients found that the information provided by telephone services was accurate.

Sources

CRA Client Satisfaction Survey, Enquiries Telephone Line for Businesses and Self-Employed Individuals

CRA Web Site Business User Survey

Analysis

CRA telephone services

The CRA Client Satisfaction Survey, Enquiries Telephone Line for Businesses and Self-Employed Individuals 2005 notes a high level of satisfaction with the clarity and the accuracy of the information provided by CRA telephone services.

• Of the people who found the information to be clear and accurate, questions were fully answered for 80%.
• A lack of clear information appears to be one of the top reasons for which small businesses and intermediaries call the CRA.
• 45% of small business Web site users who call the CRA while they are still on the Web site are most likely to clarify information they have found online.
• 28% of the intermediaries call the CRA to clarify information they have found on the site.
• 39% of intermediaries call to get more information.
• 15% of small business users called because they had not found the information on the site.

CRA Web site

The CRA Web site Business User Survey outlines that:

• 76% of small business Web site users and 84% of third parties expressed that information was easy to find.

While Table 11 below shows strong results for the Web site, 45% of small businesses needed to call the CRA after a visit on the Web site. This may indicate that the clarity of the information could be improved or that more explanation is required so that users can see whether the information applies to them.

Table 11: Overall Perceptions of the CRA Web Site

• 4.4 - CRA Outreach activities

Definition

A proxy measure of the CRA's commitment to reduce the compliance burden.

Benchmark

An overall level of satisfaction (“satisfied” to “very satisfied”) of 74.3% was expressed by small and medium-sized businesses who participated in the sessions offered by the CRA.

Source

CRA National Outreach Coordinating Committee Database

Analysis

In 2007-2008, the CRA held 156 information sessions targeting small and medium sized businesses.

• 76.9% of participants expressed an overall level of satisfaction (“satisfied” to “very satisfied”), and 23.1% remained neutral.

Table 12: Feedback Provided by Small and Medium-Sized Businesses

• Results in Table 12 clearly indicate that participants found the information seminars useful, and were satisfied.
• These seminars contribute to reducing the burden by clarifying legislative requirements and explaining the processes administered by the CRA.

Supplementary Information

The CRA Web Site Business User Survey found that only 24% of small businesses were aware of the new additions to the My Business Account service. However, 74% of third parties were aware of these additions. Outreach activities benefit participants and create awareness of the services offered by My Business Account.

^{[Footnote 1]} The statistical margin for error for the measurement is approximately +/- 1.0%

^{[Footnote 2]} It is important to note that results cannot be broken down according to small business alone. Overall, the results provide a reasonable indication of enquiries made.

^{[Footnote 3]} The Hidden Tax Burden, A business perspective on the cost of complying with Taxes, Canadian Federation of Independent Business (CFIB), August 2008.

^{[Footnote 4]} Source: CRA Web Site Business User Survey, 2006