New York, NY (PRWEB) April 06, 2014
The Tax Preparation Services industry provides assistance to consumers and small businesses in completing, reviewing and filing tax returns. Industry operators review consumer financial documents, nominate appropriate deductions and claims, review files and send documents to the Canada Revenue Agency (CRA). Tax filing is required annually and, according to the Bank of Montreal, about 54.0% of Canadians sought taxation advice from industry professionals in 2013.
Over the past five years, the industry experienced slow growth as a result of the onset of the recession. “Anemic consumer spending caused corporate profit margins to deteriorate and, consequently, businesses were forced to reduce their employee headcount to revive profit,” according to IBISWorld Industry Analyst Jeremy Edwards. Accordingly, the national unemployment rate significantly increased in 2009, and industry growth slowed before contracting in 2011 as fewer Canadians were required to file tax returns. Additionally, lower per capita disposable income caused consumers to become increasingly price sensitive, leading more individuals to complete returns without assistance. Overall employment levels have since increased, generating stronger industry performance as more consumers are able to pay for tax professionals. As a result, industry revenue is expected to grow at an average annual rate of 1.7% over the five years to 2014. In 2014, the industry performance is expected to improve, with anticipated growth of 3.1% to $731.1 million.
“The introduction of online tax preparation services has been the most prominent industry trend over the past five years,” says Edwards. A strong increase in the number of broadband connections, coupled with increasing internet capabilities, have allowed more consumers to complete their returns through tax software such as Intuit's TurboTax or the CRA's NETFILE.
Industry growth is expected to accelerate due to stronger macroeconomic conditions that will result in more overall paid employment; consequently, more consumers will require tax preparation services. Industry operators are also expected to offer value-added and additional services, such as financial-document compilation and consulting services, in an attempt to compete with increasing use of online services. Nevertheless, businesses that offer improved and user-friendly tax preparation software are expected to be the most successful over the next five years.
For more information, visit IBISWorld’s Tax Preparation Services in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry provides tax return preparation services to individuals without also providing accounting, bookkeeping, billing or payroll process services. Although the offices of CPAs are excluded from this industry, basic knowledge of tax law and filing requirements is required.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.