New draft legislation on income sprinkling still raises concerns, says business coalition opposing tax changes
OTTAWA, Dec. 14, 2017 /CNW/ - The legislation on income sprinkling released by Finance Minister Bill Morneau, while a step towards clarity, still represents an administrative and financial burden for a number of small businesses and the families that own them.
The Coalition for Small Business Tax Fairness, a unified voice of over 74 organizations representing hundreds of thousands of business owners across the country, remains concerned that the new rules will cause business owners to have to cut through burdensome interpretative red tape in their efforts to prove that they or family members belong in one of the categories that would exempt them from the new sprinking rules. The coalition continues to urge government to create a blanket exemption for spouses.
"The measures announced by Min. Morneau leave many small business owners scratching their heads, especially if they will have to deal with the Canada Revenue Agency interpretation of reasonableness," said the Hon. Perrin Beatty, President and CEO of the Canadian Chamber of Commerce. "Although there has been some improvement, these are not measures to be rushed. This situation highlights the need for an in-depth overhaul of our tax system, in order to make it more competitive."
"The measures announced are slated to come into force in two weeks. That's far from enough time for businesses to adapt," said Dan Kelly, President of the Canadian Federation of Independent Business. "We continue to urge the government to slow down, and to listen to the recommendations from the Senate Committee on National Finance."
The Senate Standing Committee on National Finance issued a report that recommends the government withdraw the proposed changes to the taxation of private corporations in Canada, or barring that, to push back their application to 2019. The Senate Committee is also issuing a recommendation to proceed with an in-depth review of the country's tax system.
Given the complexity of these proposals, more time is needed to ensure that these changes can be implemented and do not harm small businesses, the backbone of the Canadian economy. The coalition stands ready to work with the government to find solutions that won't adversely affect small business' ability to grow, innovate and create jobs.
The Coalition for Small Business Tax Fairness is encouraging business owners and other concerned Canadians to contact their Members of Parliament and use the hashtags #unfairtaxchanges #taxesinéquitables on social media. For the full list of Coalition members, please visit smallbiztaxfairness.ca.
"The rules are complex and unnecessary, however it appears that the Government has left several opportunities to work within the rules (either intentionally or not). We need to focus on the passive income proposals which have a much bigger impact on the Canadian economy."
- John Reid, CEO, CATAAlliance
SOURCE Coalition for Small Business Tax Fairness
For further information: For media enquiries or interviews, please contact: Guillaum Dubreuil, Director, Media Relations - Coalition Support, 613-797-1860