The Canadian government is seeking more than $130 million in unpaid taxes and penalties from Amway of Canada Ltd. That amount exceeds the company’s total retail sales for one year.
Canada’s federal tax department says Amway of Canada owes $ 105 million in taxes, duties, and penalties on goods imported into the country between 1977 and 1980. The government is seeking an additional $7.9 million in unpaid duties and taxes on goods imported between 1974 and 1977. In a separate action, Amway is appealing a ruling on the value of goods the firm has imported into Canada since 1980. Depending on the outcome of the appeal, the ruling could cost the company millions of dollars.
The American-based Amway Corporation and its Canadian affiliate were fined $25 million last year after pleading guilty to dodging $29.6 million in import duties and sales taxes (CT, Dec. 16, 1983, p. 38). That fine was the largest ever levied by a Canadian court.
The decision to try to collect an additional $105 million from the giant direct-sales corporation followed a judicial process during which Amway presented its arguments against the claim. If the firm refuses to pay the amount being sought, the tax department will take the case to the Federal Court of Canada.
Jack Wilkie, Amway’s public relations manager, said the company plans “to continue to make our arguments and to litigate aggressively.” He described the tax department’s move as a “minor procedural action.” Amway spokesman Peter Bennett said the firm’s Canadian sales are running ahead of projections despite the problems with the government and the resulting news coverage.
Founded in Michigan in 1959 by Richard DeVos and Jay Van Andel, Amway is known for projecting a Christian, patriotic image. Amway has 7,000 employees worldwide, with 400 working for its Canadian subsidiary. Some one million distributors sell the company’s products.
LESLIE K. TARRin Toronto
