(OTTAWA, ON) – The federal government has announced tax reductions for small business. Since 2006, the Government has lowered taxes, cut red tape, and encouraged entrepreneurship. This includes reducing the federal small business tax rate from 13.12 per cent to 11 per cent and increasing the amount of annual income eligible for this lower rate from $300,000 to $500,000.
Economic Action Plan 2015 proposes to further reduce the federal small business tax rate to nine per cent by 2019, with the first reduction taking effect in 2016. This will benefit almost 700,000 small businesses annually from coast to coast to coast, providing them with additional resources to help spur job creation and economic growth.
The tax reductions for small businesses proposed in Economic Action Plan 2015 have been made possible by balancing the budget. It is also one of many actions to date the government has taken to support small businesses, including reducing red tape, improving access to financing, introducing the Small Business Job Credit to provide relief to small businesses on Employment Insurance premiums paid in 2015 and 2016, launching the Venture Capital Action Plan and Business Innovation Access Program, and increasing the Lifetime Capital Gains Exemption.