The following electronic version is for
informational purposes only.
The printed version remains the official version.
BUDGET 97: REPORTS
Ministry of Finance and Corporate Relations
Province of British Columbia

TABLE E2
ECONOMIC DEVELOPMENT AND
BUSINESS ASSISTANCE PROGRAMS TAX EXPENDITURE
  1996/97
Estimated Cost
  ($ millions)
PROVINCIAL SALES TAX
  Commissions paid to retailers and hotel operators 24
    Exemptions for the following items:
  • Livestock for human consumption and agricultural feed, seed
        and fertilizer

  • Exempt purchases by farmers, fishers and aquaculturists

  • Magnetite for processing coal, eligible exploration equipment and drill bits for mineral exploration and production

 
 
 
30
 
19
 
 
2
FUEL TAX
  Tax exemption for international flights carrying cargo 8
  Lower rate for family farm trucks (on road) 3
PERSONAL INCOME TAX
  Venture capital tax credit 10
  Employee venture capital tax credit 6
CORPORATION INCOME TAX
Provincial Measures
  International financial business tax refund 1 4
  Two-year corporate income tax holiday for small business 2
Federal Measures 2
  Accelerated write-off for capital equipment used in research and
    development 3
 
4
  Allowable business investment loss 9
  Non-taxation of life insurance companies' world income 7
CORPORATION CAPITAL TAX
  Exemption for family farm and cooperative corporations 3
  Two-year tax holiday for eligible British Columbia investment expenditures 19
SCHOOL AND RURAL AREA PROPERTY TAXATION 4
  School tax assessment reduction on current values for farm buildings and
    farm land, and residences in the agricultural land reserve
 
16
  Assessment of farm land at farm use values 5 84
  Assessment exemption of $10,000 for industrial and business properties 6
  Overnight tourist accommodation assessment relief 3
  Managed forest land classification 8
OTHER TAXES
  Oil and gas royalty holiday 4

Includes employee income tax refunds.
The provincial revenue loss estimates for federal measures are based on estimates of the federal losses contained in Government of Canada: Tax Expenditures, 1995. The federal estimates are based on 1992 corporation incomes. British Columbia corporate income tax expenditures are estimated by grossing-up the federal estimates to 1996/97 levels taking into account the growth in corporate taxable income levels, applying British Columbia's share of corporate taxable income to the adjusted estimates, and then applying the relevant tax rates. Certain tax expenditure items have been excluded where no data were available.
The tax expenditure for accelerated write-offs for capital used in research and development is based on the estimate in the federal tax expenditure report. An estimate for the tax expenditure involved in accelerated write-offs for Canadian development and exploration expenses, which was given in last year's report, is not included this year. It has been dropped because the treatment of this item has been changed in the federal tax expenditure report on which last year's provincial tax expenditure estimate was based. In the federal report, development and exploration expenses are now noted as a "memorandum" item because the available data do not permit a separation of the tax expenditure associated with claiming these expenses from the tax reduction that would be considered an ordinary feature of the tax system. Other tax deferrals, such as the difference between capital cost allowance rates and book depreciation are not reported because of the difficulty in measuring the value of the tax expenditure. (See Government of Canada: Tax Expenditures, 1995 for details.)
Estimates are for the 1996 calendar year and include only school and rural area property taxes levied by the province.
Currently, the values of farm and land residential land in the Agricultural Land Reserve are reduced by 50 per cent for school tax purposes. The $84 million estimate assumes the 50 per cent reduction to value would not be applied to farm land assessed at market value. If, on the other hand, this reduction were applied, the tax expenditure of not assessing farm land at market value would be only $43 million.


Budget 97 Reports


BC Budget 97


BC Ministry of Finance and Corporate Relations

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