Since the year 1941, the Canadian government imposed taxes pertaining to inheritance. This estate tax in Canada was imposed by the government when the property was passed on to the heir or the beneficiary. The tax levied was based not only on the size of the property the beneficiary is inheriting but also the relation shared between the donor and the donee. Age of the heir was also a factor, which was taken into consideration. The estate tax in Canada was imposed on the person who was inheriting the property and this tax was referred to as “Succession duty”. Prior to the implementation of the Estate Tax in Canada (revised), there was the concept of “succession duty”. In fact, the new Estate Tax Act substituted “Succession duty” in the country.
Features of succession duty:
Succession duty had several drawbacks. It did not generate much revenue for the then government in Canada. Four years before the implementation of the new Estate Tax Act in the year 1958, the Canadian government imposed tax on estates whose value was $371,985,000. The revenue earned by the government was approximately, $39,100,000. Compared to the estate tax in Canada, it was observed that other taxes earned more revenue for the Canadian government. For instance, in the same year (1954), revenues from personal income tax was recorded as $1,187,700,000. Income from imposing taxes on the corporations were recorded as $1,191,200,000.
Succession duty was replaced:
Later on there were changes in the estate tax in Canada and it was decided that the estate tax in Canada would be levied not on the beneficiary but on the property or the estate. The tax rate would be determined by the market value of the estate. In the year 1958, the Estate Tax Act was formulated in Canada. This Act was executed in the year 1959.
Norms differed in some of the provinces of Canada:
Provinces of Ontario as well as Quebec manifested a different trend. It was observed that these provinces were also imposing inheritance tax besides the estate tax in Canada.
Features of the Estate Tax Act:
The main advantage of the Estate Tax act was that the Canadian government had adopted a standard procedure to impose estate tax on the estate and not on the person inheriting the estate. This was beneficial not only for the heir but a uniformity was brought about in evaluating real estate property. It also proved to be beneficial to the authorities calculating the value of property. The reason being, considering the age, relationship, size of the property could have been quite cumbersome with regard to the estimation of a property. By adopting this method, a standard tool was obtained.
In Nigeria, as well as around the world, a majority of taxpayers view tax not as a contractual contribution to government expense, but as an involuntary tribute to be paid to avoid prosecution and penalty. Merely transcribing taxes from economic textbooks into local law will not work; tax regimes have to be developed from within the society, and targeted at the peculiar needs of the government. Tax policies have to be written by the people – and for the people. Only then would a sense of participation and expectation be truly generated, and the tax system manifestly effective.
Nouriel Roubini, a.k.a. “Doctor Doom”, is chairman of Roubini Global Economics and professor of economics at New York University’s Stern School of Business. Roubini has been consistently cited as one of the world’s top global thinkers. This year, he was voted as the most influential economist in the world by Forbes magazine.
Professor of Economics & Director of the Earth Institute at Columbia University. Special Adviser to the UN Secretary-General on the Millennium Development Goals. Founder & co-President of the Millennium Promise Alliance.
Chancellor of the Exchequer of the United Kingdom from 1992 to 2007. Prime Minister of the UK between 2007 and 2010. Inaugural 'Distinguished Leader in Residence' at New York University. Advisor at World Economic Forum
CEO and co-CIO of PIMCO. Served as President and CEO of the Harvard Management Company for 2 years, while also working at the IMF for 15 years. In 2008, his book "When Markets Collide", won the Financial Times award for Business Book of The Year in addition to being named as the one of the best business books of all time by The Independent.
James W. Harpel Professor of Capital Formation and Growth at the John F. Kennedy School of Government in Harvard University. Director of Program in International Finance and Macroeconomics at the National Bureau of Economic Research.