Provincial Taxes In Canada Needs To Be Alignedurgently
The good news for Canada is that, it has the lowest debt burden amongst G8 countries.
October 8, 2012 (Newswire.com) - Taxes in Canada are to be paid separately to the Federal and Provincial Government. The various taxes people are supposed to pay in Canada are
Personal Income Tax
Pay Roll Tax
Health and Prescription Insurance Tax
When studied thoroughly, the provinces show a different slab of tax rates. For example Nova Scotia charges 8.79% on $29,590 whereas Ontario charges 5.05% on $39,020.
In a survey it has been reported that Canada charges the lowest business taxes in the G7 countries. Jack Minz, member of Finance Canada's economic advisory Council says, "Federal Government should move on to reviewing other parts of its tax system."
He lays emphasis on the alignment of business taxes on all the provinces of Canada.
The example of disparity in taxes is revealed by the information that Ontario had done away with Corporate Capital taxes way back in 2010 whereas others continued charging the same till June of 2010.
Ontario did not proceed with a previously promised cut in its corporate tax rate which was made 10% from the older 11.5% rate. Ontario had surmised that it's going to hit the employment market.Ontario also propose that it would rise and additional $700 million revenue in year.
In another example of disparity in taxes, British Columbia decided not to harmonize its sales tax with the federalgovernment.
According to Dr. Mintz, the differences in tax rates actually allow the international entrepreneurs and companies to select a province for their investment which has the most competitive tax rate.
As because Atlantic Provinces have competitive rates that's why they are preferred by the international investors. However, provinces alike Manitoba, Saskatchewan and British Columbia have a higher rate.
Dr. Mintz also made it clear the GDP is stagnant for the last few years merely due to differences in the tax rates. There are some who are quite aggressive in charging the taxes whereas there are some who have quite low rates. When the two are averaged out, the GDP is calculated to be at the same place where it used to be even years back.
Study also reveals that the neighboring countries of Canada have a much higher income tax rates than the country. This probably makes them enjoy a better GDP than Canada. USA has a GDP of more than $14 trillion.
The good news for Canada is that, it has the lowest debt burden amongst G8 countries. Experts suggest that may be a favourable tax rate and plan ensures more and more tax payers to come forward and pay the taxes. If it would have been strict on it probably the debt burden would have been much higher than what it is today.
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