Quebec's Sales Recording Module (SRM): Fighting the Zapper, Phantomware, and Tax Fraud with Technology

Posted: 20 Jan 2010

See all articles by Richard Thompson Ainsworth

Richard Thompson Ainsworth

NYU - Graduate Tax Program; Boston University - School of Law

Urs Hengartner

University of Waterloo

Date Written: January, 20 2010


On January 28, 2008, Quebec's minister of revenue, Jean-Marc Fournier, announced that by late 2009 Revenu Québec would begin testing an anti-fraud device - the sales recording module (SRM) - in the restaurant sector. The SRM is designed to detect the erasure of digital sales records in electronic cash registers and point-of-sale systems - a type of fraud that contributes to more than $425 million annually in lost tax revenues in the restaurant sector alone. Quebec studies indicate that restaurateurs are increasingly employing technology to alter digital records in order to conceal income from the business and avoid reporting and remitting taxes due. The SRM will assist provincial auditors in detecting such fraudulent activities.

Revenue authorities around the globe have taken two approaches to assuring the integrity of business records in cash-intensive industries: one approach secures the till; the other relies on principles of compliance and enforcement to encourage good business practices. With the introduction of the SRM, Quebec is taking steps to become a fiscal till jurisdiction.

This article considers the SRM in a comparative context. The technological approaches of Germany and Greece (both of which are fiscal till jurisdictions) are contrasted with the approach adopted in the Netherlands (a principles-based jurisdiction), which relies on intensive technology-based audits to assure digital record accuracy.

The article concludes with a suggestion that there may be something to learn from the US streamlined sales tax initiative, which employs government certification of tax technology to ensure the accuracy of transaction tax determinations.

Keywords: Fraud, Tax Evasion, Restaurants, Anti-Avoidance, Technology, SRM

Suggested Citation

Ainsworth, Richard Thompson and Hengartner, Urs, Quebec's Sales Recording Module (SRM): Fighting the Zapper, Phantomware, and Tax Fraud with Technology (January, 20 2010). Canadian Tax Journal/Revue Fiscale Canadienne, Vol. 57, No. 4, p 715, 2009. Available at SSRN:

Richard Thompson Ainsworth (Contact Author)

NYU - Graduate Tax Program ( email )

Bobst Library, E-resource Acquisitions
20 Cooper Square 3rd Floor
New York, NY 10003-711
United States

Boston University - School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States

Urs Hengartner

University of Waterloo

Waterloo, Ontario N2L 3G1

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