Quebec loses $365 million in QST on imports, according to the Auditor-General

Quebec loses $365 million in QST on imports, according to the Auditor-General

Quebec loses $365 million in QST on imports, which would result in significant tax losses estimated at nearly $365 million for the year 2020, according to a new report by the Auditor General (VGQ).

In its report, it concludes that Revenu Québec does not “appropriately manage” the QST collection and remittance process.

According to the auditor, Revenu Québec is responsible for implementing new provisions to limit these losses. This would also make it possible to erase the inequalities with regard to Quebec companies.

Since January 2019, suppliers outside Quebec and operators of distribution platforms are required to collect and remit the QST on sales to Quebec consumers of imported goods. However, according to the report, the rules governing this obligation do not make it possible to recover the QST that they had to remit before their registration in the QST file.

Evidence leads us to believe that the amounts given to him could be higher if certain shortcomings were corrected.

Excerpt from the VGQ report

Findings without appeal

The VGQ considers that Revenu Québec’s administration of the agreement allowing the Canada Border Services Agency to collect the QST is inadequate. She describes as “insufficient” the management and follow-up of Revenu Québec in this regard.

Despite the measures put in place, Quebec still suffers tax losses for goods from abroad imported into Quebec by mail or courier,” reads the report.

It is asking Revenu Québec to improve its controls following the provisions that came into force in July 2021. These require the collection of QST on goods sold via distribution platforms.

Revenu Québec’s assessment of the achievement of the objectives of the various measures would not be adequate either. To assess it, Revenu Québec uses the total amount of QST collected since 2019 by suppliers outside Quebec.

“However, this data does not make it possible to determine to what extent the activities carried out by Revenu Québec have made it possible to recover tax losses attributable to the non-collection of the QST by suppliers outside Québec, explains the report. However, the indicators selected for this purpose should take into account the estimated tax losses as well as their evolution.