As parents and teachers, we all have but one common wish and goal — for our children to be good at whatever they choose to do in life to succeed and prosper. We strive hard to equip them with all the necessary knowledge and skill sets that can help them follow their dreams and live a comfortable, happy life. From studying different subjects at school, to gently teaching them about people and relationships to making them physically robust through sports, we leave no stone unturned at home or at school to mould their young minds. And yet, we fall short of teaching them that one subject, that one skill that each of them will have to put to use as they climb higher on the ladder to prosperity…

Dealing with taxation.

Why is Tax Literacy Important?

Let’s be honest. Most of us still struggle with taxes, even after being taxpayers for years. And the more sources and ways we earn from, the more complicated the rules! Perhaps if we had been introduced to taxation when we were still in school, just like we learned the basics of mathematics and science, it would have been easier to grasp and understand.

Think of it this way — tax literacy at the school level would mean taking the first steps toward grooming our future workforce. Children, by their very nature, are enthusiastic, curious and eager to learn. Introducing even the basics of taxes at a young age will make them much easier to understand, taking away a big chunk of the tremendous stress associated with taxation. Of course, the intricacies and complex rules will have to be handled by specialists, but knowing the what and why of taxes can go a big way in making our children not just aware but responsible taxpayers.

Making Tax Literacy Children-Friendly:

Taxation is a complicated subject. Making such a complex subject children-friendly is no piece of cake. It entails not just simplifying the subject so that a school kid can understand it but also having enough knowledge to answer the many questions such curious minds are bound to raise. How does one go about it, then?

Thankfully, the CRA has your back already.

Identifying this pressing need for tax literacy from a young age, the CRA has designed a student-friendly manual of Canada’s tax system, complete with modules and lessons that are easy to understand and learn.

• Covers all basics: Available on the CRA website itself, these lessons on taxation are divided into 7 broad modules that deal with everything from why taxes need to be paid, who is supposed to pay taxes, what category of taxpayers you fall into based on your occupation, and how to prepare a simple tax return and file it.
• Simple yet detailed: Each category is further divided into smaller sections and sub-sections, each of which can be covered in less than 10 minutes. For instance, the very first module explains (i) what a Social Insurance Number (SIN) is and why it is required, (ii) how to get it, and (iii) how to keep it safe. As it progresses, the module covers what a TD1 Form is, what a T4 slip is as well as the difference between gross and net pay.
• Quick recaps: Each section also asks the student a question on the information learned so far, making for a short, quick quiz that acts as an effective revision.
• Put to Practice technique: The module on Completing a Simple Tax Return comes with an exercise that allows the child to put his newly acquired knowledge to the test by calculating a refund or a balance owed. This further helps boost his or her confidence and makes for an interesting and informative activity.
• Encourages tax paying: The last module also highlights the various credits and benefits of filing taxes, encouraging children to be responsible taxpayers in the future.

Teaching Taxes to our Youth Needs the Coordinated Efforts of Parents and Teachers.

While teachers can impart knowledge at schools, it is essential that parents also make their children aware of the importance of this knowledge in daily life. Sharing small but useful tips like why it’s important to save receipts or bills, or how to keep track of expenses can help them understand the tax system better and inculcate good “tax habits”. In fact, you can even encourage your child to keep track of how he or she spends their pocket money as a practical activity.

With the CRA’s guidance and the support of their parents and teachers, Canada’s future workforce will hopefully have a much calmer tax season than we do now.

Let’s Support Programs that Educate our Youth on Tax Literacy

Students and Teachers, if you want to learn more about the Government of Canada’s initiative to help educate the next generation on how the Canadian tax system works, please click on the following link:

https://www.canada.ca/en/revenue-agency/services/tax/individuals/educational-programs.html