WINNIPEG, MB – After a careful review, the Coalition for Small Business Tax Fairness is asking Finance Minister Bill Morneau to take more action on the government’s proposed tax changes which continue to unfairly target small business.
A Coalition of 73 organizations representing hundreds of thousands of business owners nationwide noted that while budget measures addressed some of the concerns related to the complexity of earlier proposals on passive investments, the approach outlined in the 2018 budget will create an entirely new group of losers.
“These new proposals unfairly penalize small business owners who have spent years saving to weather downturns and make future investments in their employees and their business. Unfortunately, the new approach means many firms with existing passive investments will lose access to the lower small business tax rate on future business income,” said Dan Kelly, president of the Canadian Federation of Independent Business (CFIB). “While we welcome some of the progress made in the recent Federal Budget, we are hearing from small business owners who are being unfairly stripped of their access to the small business tax rate and are now facing tens of thousands in higher corporate income taxes every year.”
“The Federal government is missing a key opportunity to provide important tax clarity and small business owners need some assurance heading into tax season,” said Kelly. “With more uncertainty about competitiveness facing Canadian business owners, we urge the government to commit to find common sense solutions to help businesses grow and prosper.”
In a recent letter to Minister Morneau, the Coalition is asking government to:
· Immediately conduct an economic impact assessment of the proposed package and delay implementing any tax changes until the assessment is complete.
· On passive investment:
o Do not proceed with the proposed passive investment rules OR
o If determined to proceed, ensure past passive investments are excluded when determining eligibility for the small business deduction going forward.
o Index the proposed $50,000 and $150,000 passive income exemption limits to inflation.
· On income splitting:
o Postpone the changes until January 1, 2019 at the earliest.
o Consider, at minimum, a full exemption for spousal income and dividends from the new income splitting rules.
Read the Coalition’s letter to Minister Morneau.
The Coalition for Small Business Tax Fairness is the voice of more than 70 organizations representing hundreds of thousands of business owners across the country.
By The Coalition for Small Business Tax Fairness
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