Businesses Ringing In The New Year With Tax Breaks
QUEEN'S PARK, Jan. 1 /CNW/ - The McGuinty government is strengthening
Ontario's economic advantage by providing a series of tax breaks for
businesses that will take effect January 1, 2008.
In the 2007 Economic Outlook and Fiscal Review, the government proposed
new tax initiatives that would provide $1.1 billion in provincial tax relief
for businesses over three years.
The measures would further enhance Ontario's tax competitiveness and
stimulate growth through increased investment and job creation.
"Although economy has proven to be resilient, the McGuinty government
recognized the need for immediate tax relief in some sectors. Areas, such as
manufacturing, forestry, agriculture and tourism, face serious challenges,"
said Finance Minister Dwight Duncan. "To support these sectors and all of
Ontario's businesses, we've proposed a number of tax breaks - some are
retroactive to January 2007 while others will begin in the New Year."
Tax breaks taking effect January 1, 2008, include:
- eliminating the Capital Tax for businesses primarily engaged in
manufacturing and resource activities;
- increasing the Ontario Film and Television Tax Credit rate to
35 per cent from 30 per cent; and
- increasing the Ontario Production Services Tax Credit rate to
25 per cent from 18 per cent.
Some of the proposed tax reductions are retroactive to January 1, 2007,
- providing a 21-per-cent Capital Tax rate cut for all businesses
retroactive to January 1, 2007, on the way to full elimination in
- increasing the small business deduction threshold to $500,000 from
$400,000 - retroactive to January 1, 2007.
The government is also proposing to extend by one year the phase-out of
the provincial tax credit for investments in Labour Sponsored Investment
Funds, to the end of the 2011 tax year. The maximum investment amount would
increase to $7,500 from $5,000 beginning in the 2007 tax year, providing about
$38 million in additional financial assistance over three years.
"The people of Ontario are counting on us to move Ontario forward - and
that is what we are doing," said Duncan. "Our government has recognized the
needs of our business sector, and we've taken action to continue our
province's economic success."
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For further information:
For further information: Steve Erwin, Minister's Office, (416) 325-3645;
Scott Blodgett, Ministry of Finance, (416) 325-0324