NSBA says reduction in small business tax rate is not enough to justify other proposed changes to corporate income taxes.
Earlier today, the Prime Minister announced the intention to lower the small business tax rate to 9% by 2019, a cut of 1.5% from the current rate of 10.5%. This announcement was accompanied by a further announcement that the government would be scaling back some of the proposals outlined in its “Tax Planning in Private Corporations” consultation paper. The NSBA believes that these announcements are small steps in the right direction, but that the overall changes that are still on the table will result in a net negative impact for businesses, and in particular small businesses.
The government announced the intention to scrap the proposed changes to capital gains exemptions and stressed that there would be a “simple and clear” framework for the proposed changes to income sprinkling. However, the government did not make any mention of the proposals concerning passive investment, which the NSBA feels is the most damaging to businesses and is the most unreasonable of the three original proposals.
“Passive investment is huge in terms of economic development and a business’ ability to create jobs and opportunities,” said Keith Moen, Executive Director of the NSBA. “We feel that the refined changes announced today and the lowering of the small business tax rate are positive changes from the original proposal but the pieces that remain still amount to a net loss for small business.”
The NSBA has also noted that the announcement of a lowering of the small business tax rate strikes the business community as a disingenuous move two weeks after the closure of the consultation period on widely-unpopular tax changes. If the government was sincere about this change, the NSBA feels that it should have been part of the original proposal or implemented in 2015 as per the 2015 election platform.
“We are skeptical about the inclusion of a reduction in the small business tax rate at this point in time,” said Mr. Moen. “Given that it was part of the Liberal platform in the 2015 election and scheduled previously by the Stephen Harper government the NSBA would have expected this government to have already implemented such a tax reduction instead of holding back for a politically opportune moment. This type of maneuver is an example of why this government has zero credibility in the eyes of the business community on matters of small business taxation.”
About the NSBA: The NSBA is a member-driven and focused organization that serves, promotes and protects business throughout Saskatoon and beyond. Though our origins and roots are in Saskatoon’s north end, today we encompass far more than that. We have developed our mandate and reputation by being a relevant, topical and effective organization that interacts with all levels of government and industry on a variety of issues for the betterment of our local economy.
For more information:
Keith Moen
Executive Director
NSBA
(306) 242-3060
