Use of Tax Data in the Unified Enterprise Survey (UES)

Use of Tax Data inUse of Tax Data inthe Unified Enterprise Survey (UES)the Unified Enterprise Survey (UES)

Workshop on Use of Administrative Data in Economics Statistics

Marie BrodeurMoscow

November, 2006

Statistics CanadaStatistique Canada

Overview of the presentation

1. UES Background 2. Integrated Approach Principles 3. Survey Characteristics 4. Business Register 5. Sampling 6. Achievements and Future Directions 7. Use of Tax Data 8. Research and development

1. UES Background

Major project to improve provincial statistics (1996)

Reliable Annual Provincial Data for the Allocation of HST Revenues (SNA I-O Tables)

More detailed Industry & Commodity dataCreation of Enterprise Statistics Division

(ESD)UES Pilot (RY 1997) -- 7 surveysGradual Expansion of Surveys; Covers 65%

of GDP

2. Integrated Approach Principles

Use of Single, Unduplicated Frame -- the BR

Expanded coverage

Common Sample Design Methodology

Integrated Questionnaire -- common / simple language; harmonized concepts / variables

Centralized Data Collection at the Statistical Establishment level

2. Integrated Approach Principles (continued)

Common Generic Processing Systems and Methods

Centralized Warehouse

Head Office Survey

Maximum Use of Tax Data

Annual Profiling of Large Enterprises

Enterprise Portfolio Managers

3. Survey Characteristics

Separate Enterprise & Establishment Surveys

Over 50 Establishment SurveysOver 55,000 collection entities

representing about 68,000 establishments (17K replaced by tax for RY 2005)

Centralized Collection -- $3.5 million budget

Smallest businesses estimated through tax

4. Business Register (BR)

BR covers all sectorsIncorporated and unincorporated

businessesComplex and simple enterprisesStructure

LegalOperationalStatistical (Enterprise &

Establishment)

Updated with Administrative Data

5. Sampling

Stratified Random Sample Industry (NAICS 4) Province Size

1 Take-all stratum2 Take-some strata (50% of units

replaced by tax)Take-none strata (under Royce-

Maranda thresholds)

Stratification in One Look

Take-all

Take-some 2

Take-some 1

Take-none

Cell

Must takeunits Royce-Maranda (RM)

Exclusion Thresholds:

•To reduce response burden on small enterprises

Sam

plin

g re

venu

e

Sampling ProcessSampling Process

Survey Universe File(2M businesses)

Sample Control File(2M businesses)

Survey Interface File38K CEs / Questionnaires

Tax Est’d (1.4M)

UES Sample (70K businesses)

Tax Replacements17K CEs

55K CEs

BR(2.3M businesses)

6. Achievements

TimelinessCentralized Processing

Systems and DatabasesResponse BurdenUse of Tax Data

6a. Timeliness

Very problematic during start-up yearsMany processing systems in

developmentProblems with questionnaires

Task force created in 2001Target: 15 months after reference yearSince RY 2003, all surveys between 12-

15 month period

6b. Centralized Processing Systems and Databases

Develop centralized systems Move away from stand-alone Single point of access for security

Integrated Questionnaire Metadata System

Edit and imputationAllocation and EstimationData Warehouse

Centralized CollectionCentralized Collection

Mailout(38K CEs)

Pre-Contact(17K Businesses)

Edit / Verification(BLAISE)

Receipt(75% target)

Delinquent Follow-Up

Capture / Imaging

“Clean” Records

Score Function

Post-Collection ProcessingPost-Collection Processing

Pre-Grooming

Allocation / Estimation

Edit & Imputation

“Clean” Records

Central Data Store

Subject Matter Review & Correction

Tool

Tax Data

USTART

7. Use of Tax data

Significant process since 1997Strategic Streamlining Initiative Result

Almost 65% of units replaced by tax data

Impact of 27% in the total estimate

Streamlining Initiatives at STC

Announced in 2002 Objectives

Maintaining qualityCreate efficiencies Enhance work flowsIdentify trade-offs

Expand the use of tax data for survey replacement

T1\T2 Project

Objective is to substitute 50% of simple establishments.

Direct Data Replacement for annual surveys usingT1(unincorporated)T2 (incorporated)

Facilitated by the Chart of Accounts (COA).

Types of Administrative (Tax) Data

From the Canadian Revenue Agency (CRA)

Agreement between CRA and STCT1 (unincorporated businesses)T2 (incorporated businesses)T4 (pay slips)GST (goods and service tax)PD7 (payroll deduction accounts)

Processing of Tax Data

Edit erroneous reports Outlier detectionEliminate duplicationImpute for missing valuesAnnualize in case of monthly

data

Stratification in One Look

Take-all

Take-some 2

Take-some 1

Take-none

Cell

Must takeunits Royce-Maranda (RM)

Exclusion Thresholds:

•To reduce response burden on small enterprises

Sam

plin

g re

venu

e

RY2005 Methodology: Tax Replacement

T2

T1 Take-None:

Sample of e-filers

T2 Take-None:

Census of General Index of Financial Information (GIFI)

ROYCE-MARANDA THRESHOLDS

Main sample to be surveyed

Not eligible for tax : questionnaire

Tax replaced

Characteristic survey (some Services surveys) or questionnaire (all other divisions)

T1

Main sample to be surveyed

UES: Use of Tax Data

Validation (comparison)Verify dubious collected data against

the equivalent tax data record Imputation

One of the methods used for non-response

EstimationBelow take-noneDirect Data Replacement Some annual surveys 100% tax (Taxi

& Limousines, Survey of Mapping) Update Business Register Allocation of survey data ( use tax

revenues, salaries and expenses)

CHART OF ACCOUNTSWhy does a Bureau of Statistics need one?

BUSINESS WORLD

Chart of Accounts (COA)

BUREAU OF STATISTICS

DISSIMINATION

COLLECTION

Chart of Accounts

SalesOperatingrevenue Cost of

sales

Grossprofit Expenses

EBIT

OutputsInputs

Valueadded

Shipments OperatingSurplus

GDP

LINK, BRIDGE, CONCORDANCE

Expected Benefits of a Chart of Accounts

Standardization in business data collectionHigher survey responseIncrease in quality of dataComparison of data from various sourcesIncrease efficiency in using administrative

data

Links to Chart of Accounts

CHART OF

ACCOUNTEstablishment

Legal entity

Legal entity

GST Data

Monthly tax dataUsed to replace survey data for

monthly surveysImplemented for manufacturing,

services and retail surveysFor RY 2005 used for analytical

comparisons for annual Services Surveys

Research and Development

Data Integration Project make a more efficient use of tax data

Development of new quality indicators (e.g. Rates, coefficients of variation)