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Tax Cheats Beware: Zapper Use Will Not Be Tolerated

Minister Findlay meets with local businesses to discuss new civil and criminal sanctions for possession or use of electronic suppression of sales software

SASKATOON, SASKATCHEWAN -- (Marketwired) -- 08/13/14 -- Canada Revenue Agency

The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue, joined by Minister Lynne Yelich, Member of Parliament for Blackstrap, and Kelly Block, Member of Parliament for Saskatoon-Rosetown-Biggar, today took part in a roundtable discussion with business owners to discuss new sanctions introduced earlier this year to combat the use of electronic suppression of sales (ESS) software and its contribution to the underground economy.


--  Economic Action Plan (EAP) 2013 proposed new administrative monetary
    penalties and criminal offences under both the Excise Tax Act and Income
    Tax Act targeting those participating in the use, possession, sale or
    development of ESS software. Those EAP measures took effect on January
    1, 2014.

--  Earlier this year, the Canada Revenue Agency (CRA) began an awareness
    campaign to ensure that businesses were aware of the new sanctions. The
    awareness activities will conclude this summer.

--  As of September 1, 2014, the CRA will begin to impose these new civil
    penalties and criminal sanctions for participating in the use,
    possession, sale or development of ESS software.


Quick Facts


--  ESS software (commonly known as "zapper" software) selectively deletes
    or modifies sales transactions in point-of-sale systems, electronic cash
    registers and business accounting systems, leaving no record of the
    original transaction behind. The software allows businesses to
    underreport their revenue and avoid paying taxes.

--  Under the new measures, businesses that use, possess, or acquire ESS
    software will face a fine of $5,000 for the first infraction and $50,000
    on any subsequent infraction. Anyone who participates in manufacturing,
    developing, selling, possessing for sale, offering for sale or otherwise
    making available ESS software will face a fine of $10,000 for the first
    infraction, and $100,000 on any subsequent infraction. They may also
    face criminal charges of up to $1 million in fines, up to a five year
    jail term, or both.


Quotes

"Our Government is serious about cracking down on tax cheats-including those who manufacture or use electronic suppression of sales software. We now have the tools to penalize these tax cheats with stronger civil and criminal consequences, including fines and even jail time. Participation in the underground economy hurts all Canadians."

The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue

"The severity of these sanctions speaks to how serious a crime this is. We are committed to rooting out tax cheats and making sure they are punished accordingly. In keeping with our commitment to reducing red tape, we have enacted these measures without creating additional reporting requirements for compliant businesses."

Kelly Block, Member of Parliament for Saskatoon-Rosetown-Biggar,

Related Products

www.cra.gc.ca/undergroundeconomy

Associated Links

www.cra-arc.gc.ca/gncy/bdgt/2013/qa08-eng.html

http://www.cra-arc.gc.ca/gncy/lrt/ess-sev-eng.html

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You can also watch our tax-related videos on YouTube.

Contacts:
Rebecca Rogers
Director of Communications
Office of the Minister of National Revenue
613-995-2960

Noel Carisse
Media Relations
Canada Revenue Agency
613-952-9184

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