Wednesday, September 20, 2017
Personal income tax minimization strategies reduced Canada's personal income tax revenues in 2016/17 and dragged total revenues lower, the Government has said.
The Annual Financial Report of the Government of Canada for 2016–17, released on September 19 by the Department of Finance, shows that personal income tax revenues decreased by CAD1.2bn (USD977m), or by 0.8 percent, in 2016–17, with total revenues down by CAD2bn, or 0.7 percent, on the previous year.
According to the report, the fall in personal income tax revenue was largely due to the impact of tax planning by high-income individuals to recognize income in the 2015 tax year before the new 33 percent tax rate came into effect in 2016.
"This behavior raised revenues in 2015–16 but lowered them in 2016–17," the report said.
Meanwhile, corporate income tax revenues increased by CAD0.8bn, or by 1.9 percent, which reflected growth in taxable corporate income, the report said. Earnings were particularly strong in the financial, retail, and information/cultural sectors, it added.