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December 28, 2006 PROVINCE REDUCES TAXES BY ALMOST $80 MILLION– – –Personal and Business Income Tax Reductions Effective Jan 1; Tuition Fee Income Tax Rebate, Pension Income Splitting in Effect Manitobans and Manitoba businesses will receive almost $80-million in tax savings in 2007 including personal and business income tax reductions, a tuition fee income tax rebate and pension income splitting, Finance Minister Greg Selinger has announced.
Tax changes effective Jan. 1 include:
· $32.3 million in personal income tax reductions by reducing the middle bracket rate to 13 per cent from 13.5 per cent, a reduction of 22 per cent since 1999, and increasing the basic personal exemption;
· $12 million in small business tax reductions by reducing the rate to three per cent from 4.5 per cent, a reduction of 63 per cent since 1999, bringing the rate from one of the highest in the country to second lowest;
· $12.9-million in corporate tax reductions by reducing the rate to 14 per cent from 14.5 per cent with a further reduction to 13 per cent on July, 1, 2008, continuing the plan of staged reductions that have seen this rate fall by 24 per cent since 1999;
· A 60 per cent tuition fee income tax rebate for Manitoba students who graduate after Jan. 1; and
· $11 million in assistance to seniors who will be allowed to split eligible pension income.
“We have met or exceeded all of our tax commitments since coming into office,” said Selinger. “These tax cuts build on the government’s long-term plan to ensure that Manitoba remains an affordable place to live, work, raise a family and operate a business.”
The province is also doubling the corporate capital deduction to $10 million from $5 million, reducing the number of companies who pay this tax by 19 per cent. The general corporate capital tax will also be phased out, starting with a 20 per cent reduction on July 1, 2008, subject to balanced budget requirements.
This year, the province also:
· eliminated the education support levy on residential property, saving taxpayers an additional $34 million in 2006;
· added $4.6 million in new savings for farmers with another 10 per cent increase in the farmland education tax rebate, bringing the total reduction to 60 per cent in 2006;
· increased the refundable portion of the manufacturing tax credit to 35 per cent from 20 per cent; and
· established a new co-op graduate hiring Incentive to support the employment of co-op education students and extended the co-op education tax credit to more employers.
“With the tax reductions coming into effect and the previous cuts, taxpayers and businesses will save $640 million annually, the most significant tax reduction in Manitoba history,” said Selinger.
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BACKGROUND INFORMATION ATTACHED |
