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The Canada Revenue Agency (CRA) administers:

• Tax laws for the Government of Canada and for most provinces and territories

• International trade legislation

• various social and economic benefit and incentive programs delivered through the tax system

• The registration of charities in Canada

• The Scientific Research and Experimental Development Tax Credit Program

Canadian Federal taxes are collected by the Canada Revenue Agency (CRA.CA).
 

The Canada Revenue Agency was previously known as the Canada Customs and Revenue Agency (CCRA.GC.CA) until a federal government reorganization in December 2003 when it was decided to split the organization's customs and revenue responsibilities into separate organizations.

Income Taxes in Canada

Both the Canadian federal and provincial governments have imposed income taxes on individuals, and these are the most significant sources of revenue for those levels of government accounting for over 40% of tax revenue. The federal government charges the bulk of income taxes with the provinces charging a somewhat lower percentage. Income taxes throughout Canada are highly progressive with the high income residents paying a significantly higher percentage than the low income residents.

Where income is earned in the form of a capital gain, only half of the gain is included in income for tax purposes; the other half is not taxed.

Personal income tax can be deferred in a Registered Retirement Savings Plan (RRSP), a tax sheltered savings account or mutual fund that is intended to help individuals save for their retirement.

To encourage individuals to use public transit, ease traffic congestion in urban areas and improve the environment, the 2006 federal budget proposed to allow individuals to claim a non-refundable tax credit (15.25% for 2006 and 15% for 2007 and subsequent years) for the cost of monthly public passes or those passes of a longer duration (e.g., annual passes). The credit will apply to the cost of public transit passes that is in respect of transit on or after July 1, 2006.

This measure will encourage public transit use by providing $150 million in 2006–07 and $220 million in 2007–08 in benefits to approximately two million Canadians who make a sustained commitment to use this environmentally friendly mode of transportation. An individual who purchases passes costing $80 per month throughout the year will receive up to about $150 in federal tax relief for the year.

Federal and provincial income tax rates are shown at Canada Revenue Agency's website.