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The CRA Cautions Businesses on Electronic Sales Suppression Software (Zappers)

OTTAWA, ONTARIO -- (Marketwire) -- 11/07/12 -- The Canada Revenue Agency (CRA) is aware that electronic sales suppression software (often referred to as "Zapper" software) is currently being marketed and sold to some Canadian businesses. Electronic sales suppression software is designed to work with point-of-sale systems and electronic cash registers. It can be used to select and delete cash sales from computer records in order to evade federal and provincial taxes. In some cases identified by the CRA, businesses have collected taxes from patrons, suppressed sales records using this software, and not sent the taxes to the CRA as required by law.

While Canada has one of the highest rates of compliance in the world, the illegal use of Zapper software is a problem that the CRA is actively addressing. The CRA is increasing its efforts to identify those who develop, sell, or use electronic sales suppression software for illegal purposes. Responsible business owners know that hiding income to evade taxes is against the law. Using this software for illegal purposes is not worth the risk.

What are the consequences for businesses?

Businesses that have used electronic sales suppression software to underreport their revenues will have to pay the taxes they did not report, plus interest and penalties. The owners of these businesses could also face criminal prosecution leading to court-imposed fines, and possibly even jail time. For more information on convictions, go to www.cra.gc.ca/convictions.

What can consumers do?

Although customers may not notice if a business appears to be using electronic sales suppression software, they can do their part to ensure tax compliance by always requesting a copy of their receipt. This may help discourage some businesses from deleting transactions. If customers become aware of any business using such software, they can report suspected tax evasion over the Internet or by contacting the Informant Leads Centre. Their identity will not be disclosed. They may also provide information anonymously by going to www.cra-arc.gc.ca/gncy/nvstgtns/lds/menu-eng.html

Who cares if a business doesn't report all its income?

The CRA is committed to administering Canadian tax laws in a fair and equitable manner. Businesses that evade taxes are placing an unfair burden on the individuals and other businesses that accurately report their income and pay the taxes they owe. Not properly following tax laws also undermines competitiveness in the small business market. Those who avoid paying taxes are taking money that is needed for important investments in schools, hospitals, and other vital government services.

As a business, what can I do if I want to come forward?

If you have been using electronic sales suppression software for illegal purposes and want to come forward, you can do so through the CRA's Voluntary Disclosures Program. If you make a full disclosure before any compliance action or criminal investigation is started, you may only have to pay the taxes owing plus interest, and you will not face penalties or prosecution in the courts. For more information, go to www.cra.gc.ca/voluntarydisclosures.

Stay connected (www.cra.gc.ca/socialmedia)

To receive updates when information is added to our Web site, you can:

- Follow the CRA on Twitter @CanRevAgency.

- Subscribe to a CRA electronic mailing list.

- Add our RSS feeds to your feed reader.

- Visit our YouTube Channel for tax-related videos.

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

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