Proposed tax changes could have unintended consequences for small businesses
TORONTO, July 18, 2017 /CNW/ - The Canadian Federation of Independent Business (CFIB) is raising its concerns about potential tax changes announced this morning by the Minister of Finance. This series of proposed changes is intended to address tax loopholes, but may alter legitimate ways small firms share income among family members.
Close to 70 per cent of CFIB members employ family in their small business. As a result, CFIB is concerned that the proposed reforms could have a much broader and negative impact on these types of businesses than originally intended.
"These proposed changes may create uncertainty at a time when small businesses need reassurances from their governments," said Corinne Pohlmann, CFIB's Senior VP of National Affairs. "With fresh US demands for NAFTA changes, and several years of payroll taxes increases looming, the last thing small business owners need is uncertainty when they are doing their business tax planning. Owners of small firms were already disappointed when the small business tax rate was not lowered to 9 per cent as promised, limiting their ability to reinvest tax savings into the business," added Pohlmann.
CFIB is pleased that the government continues to express openness to the idea of facilitating genuine transfers of businesses between family members from one generation to the next. "Currently, tax rules make it less expensive to sell your business to a stranger than to a daughter or son, and this just shouldn't be the case," Pohlmann noted. "It is good news that the government is looking at potentially changing this."
CFIB continues to support efforts to ensure that Canadians are not allowed to set up fake corporations to benefit from these tax planning tools or abuse current tax rules. "It needs to be noted that the vast majority of Canada's small businesses are run by law-abiding, tax-paying citizens firmly planted in Canada's middle class," Pohlmann said.
CFIB will be carefully reviewing these proposed reforms and seeking input from the federation's 109,000 members before preparing a detailed response to the consultation.
CFIB is Canada's largest association of small and medium-sized businesses with 109,000 members across every sector and region.
SOURCE Canadian Federation of Independent Business
For further information: or to arrange an interview with Corinne Pohlmann, contact Kiara Morrissey at 416-222-8022 or firstname.lastname@example.org.