Canada’s Liberal government froze the tax rate for small businesses, despite a campaign promise to reduce it over the next three years.
The Minister of Finance pointed out that the corporate tax rate for companies earning less than $ 500,000 a year will remain at the level of 10.5 percent. This is lower than the 15 per cent rate of the total corporate tax but will be abolished reducing to 9 percent.
“This is a great breach of promise,” said Dan Kelly, president of the Canadian Federation of Independent Business.
Around 3.5 million companies are classified as small enterprises including 2.4 million private entrepreneurs. As a result of the freezing rate small businesses will pay about $ 900 million more in taxes in 2019, compared with what was planned.
The government also expects to collect more than $ 11 billion over the next five years through a variety of measures aimed at tightening the corporate tax system, including hard inspections of companies and closing loopholes that use transnational corporations to shield income from taxation.
Government restores federal tax credit of up to $ 5,000 for individual investors in 2016.