N.B. considers lower corporate, personal income taxes
The New Brunswick government has proposed a dramatic change to the provincial tax system.
Finance Minister Victor Boudreau released a discussion paper on Wednesday that contains a list of proposed taxation reforms.
The options include cutting personal and corporate income taxes by as much as $500 million annually and increasing the Harmonized Sales Tax by two per cent.
The proposal also raises the possibility of lowering the general corporate tax rate to five per cent from 13 per cent. There is also reference to a carbon tax.
The combined revenue from the proposed carbon tax and the HST increase — which would take the overall sales tax to 15 per cent — would generate an estimated $350 million per year, Boudreau.
The goal is to make the province more competitive and attractive to businesses and individuals, Boudreau said.
"We have to look at how we can refocus our entire tax system, so we need to look at this as a package," said the minister.
A simplified personal income tax system and even a single income tax rate of 10 per cent is also proposed.
"It encourages to New Brunswickers to earn more money at the end of the day," he said. "I mean, the more you earn, the more you're going to save under a flat tax system."
A non-refundable child tax credit that reduces personal income tax payable by up to $400 per child, and a universal child-care benefit of $600 annually for every child under six is also proposed.
The options are meant to generate discussion, Boudreau said, and the government will be gathering public input on the proposed changes.
The first reforms will be included in the 2009-10 budget.
With files from the Canadian Press
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