The provincial government is rolling back its plan for an 11 per cent corporate income tax rate in favour of giving small business owners a tax break.
Finance Minister Donna Harpauer introduce Bill 84 Monday, which will increase the small business income threshold from $500,000 to $600,000. This means any business making $600,000 or less will pay the two per cent small business tax rate instead of the corporate rate.
“That will be the highest threshold in Canada. We’re hoping that will attract businesses to our province, and investment into our province, and hopefully stimulate jobs,” Harpauer said.
The minister added that this change in tax direction is being brought on by uncertainty at the federal level when it comes to how small businesses are taxed.
This bill will also increase the corporate income tax rate to 12 per cent on January 1, 2018, tying Saskatchewan’s rate with the other western provinces.
According to the province, there are 5,000 – 6,000 small and medium sized businesses that report income greater than or near $500,000.
Marilyn Braun-Pollon with the Canadian Federation of Independent Business said this kind of tax change can be beneficial to growing a business.
“That extra income they can re-invest back in their business, they can grow, they can expand, they can hire that additional staff that they might not have been able to before,” Braun-Pollon said.
“It does make Saskatchewan the most competitive small business income tax structure in the country.”
The finance ministry estimates this change will bring $7.5 million to the provincial coffers in the 2017-18 fiscal year.