Improvements to the Quality of Tax Data in the Context of their Use in

Business Surveys at Statistics Canada

François Brisebois, Martin Beaulieu, Richard Laroche

Methodology Branch, Statistics Canada

July 10, 2008

Background

Statistics Canada conducts a large number of economic surveys

Annual and subannual surveys

Tax data used to reduce response burdenProcessing of the tax data to meet survey programs’ needs

Background

Goal of the talk

Present tax data sources and some of the methodological improvements incorporated in the processing

Mostly about accuracy

Description of Tax Data Sources

Three main sources (for business surveys) :

Annual tax data :

T2 : For corporations

T1 : For unincorporated businesses

Subannual tax data :

Goods and Services Tax :

Value added tax on consumption (5%) collected and remitted by enterprises

T2 - Corporations

Census available electronically

Detailed financial information (700 fields)Only 8 fields are mandatory (mostly totals)

Generic and details fields

Currently used in annual surveys as direct replacements to sampling units

“Simple” structured enterprises only

For financial information only

Production for reference year Y happens in the fall of year Y+1, by which about 70% of T2 have been reported

T2 - Corporations

Improvements to imputation strategyUsing information available from other administrative sources

More sophisticated methods for allocation of generic fields to their details

T1 - Unincorporated businesses

Gross business income and net income available for all units of the population

Details (20-50 fields) only available for units reporting electronically (e-filers vs. p-filers)

Around 50% up until 2006

Model based methods used to derive population estimates

T1 - Unincorporated businesses

Improvements

Validation of data using other administrative sources

Processing of partnerships to avoid over-coverage

Use data from “bar-code filers”

Increase coverage to about 80%

Start using for production of 2007 estimates

Goods and Services Tax

Mainly one variable : Total sales

For a given reference month, data become available to surveys 7 weeks later

Used by subannual surveys

“Simple” structured enterprises only

As replacements for sampled units

Through a ratio model to account for the difference between production month (M) and tax reference month (M-1)

Goods and Services Tax

Enterprises can remit annually, quarterly or

monthly depending on their size

Need for calendarisation to breakdown amounts

reported into “perfect months”

Goods and Services Tax

ImprovementsCalendarisation (methods and systems)

Adaptation of strategies and systems to accept

changes to tax rate

Active/inactive units: improve strategy using new fields available

Improvements for other quality dimensions

Study comparing tax data sources for coherence

Context of having annual and subannual surveys covering same population, and both using tax data

Evaluate consistency and better understand differences

Documentation of processes and studies

Inclusion of tax data fields in the central Business Register

Compute the variability associated with the use of tax data in survey estimates

Conclusion

10+ years with positive results

Experience and feedback from survey programs feed improvements to the processing of tax data

There are still many other sources to exploit

Thank you

François Briseboisfrancois.brisebois@statcan.ca

+1 613 951-6937

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