Proposed changes to small business taxes are receiving less backlash than those proposed last summer by the Federal Government.
The federal budget for 2018 was released earlier this week and so were new recommendations for small business taxes. The budget introduced two new changes, including businesses who get a passive income over $150,000 will no longer benefit from small business tax deductions and businesses who receive a passive income between $50,000 and $150,000 will see their tax rate deductions decrease gradually.
Executive Director of the Lloydminster Chamber of Commerce Serena Sjodin says the changes will affect businesses, but not as much as the proposed changes in the summer of 2017.
“We are happy to see that they have drastically revised that initial proposal and they are not as bad as where they started at.”
The previous proposal included restricting income sprinkling to adult children between the ages of 18 and 24, as well as converting a corporations income into capital gains.
Sjodin says that she would of liked to see the feds not even implement the initial proposals to change passive income because their are challenges small business owners face that the government isn’t addressing.
“One of the biggest hurtles small business owners face is saving for their retirement. If a small business owner goes on mat leave they don’t get covered by EI premiums so the small business owners really need an avenue to be able to save for life events.”
Currently the corporate tax rate is 15 per cent and for small businesses it’s 10.5 per cent. The government is reducing the tax rate to 10 per cent this year and to nine per cent in 2019.