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On
June 6, 2001, the new provincial government announced that British
Columbia taxpayers would begin to benefit from a 25 per cent cut in
provincial personal income tax. The cuts will be introduced in two
stages, with most British Columbia taxpayers receiving the full cut in
their provincial personal income taxes starting July 1, 2001. By January 2002, B.C. will have the lowest base personal income tax rate in Canada
for the bottom two brackets.
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Personal
income tax brackets have been cut as follows:
|
British
Columbia Personal Income Tax Brackets and Rates |
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Tax
rates |
| |
|
2001 |
2002 |
| Tax
bracket |
Taxable
income range* |
Pre-July
1,
2001 |
July
1,
2001** |
New** |
| 1 |
$1
to $30,484 |
8.4% |
7.3% |
6.05% |
| 2 |
$30,484
to $60,969 |
11.9% |
10.5% |
9.15% |
| 3 |
$60,969
to $70,000 |
16.7% |
13.7% |
11.7% |
| 4 |
$70,000
to $85,000 |
18.7% |
15.7% |
13.7% |
| 5 |
Over
$85,000 |
19.7% |
16.7% |
14.7% |
*Brackets
are indexed to provincial inflation.
**Rates are in effect from Jan. 1 to Dec. 31 of each year. |
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The
top marginal tax rate will be the second lowest in Canada by Jan. 2,
2002. The rate will drop from 48.7 per cent to 43.7 per cent. Without
the cuts, the province would have had the highest rate.
|
Business
Tax Cuts
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On
July 30, 2001, government announced it would eliminate or reduce several
business-related taxes to increase investment, revitalize industries
like logging, mining and transportation, strengthen emerging sectors
such as high-technology and break down other barriers to economic
growth. These tax changes will inject $248 million into the provincial
economy this fiscal year.
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Effective
July 31, production machinery and equipment purchased by eligible
manufacturers and by businesses in the logging, mining, and energy
sectors will be exempt from provincial sales tax. The exemption replaces
a three per cent tax credit introduced last year and will save
businesses $87 million this fiscal year.
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The
corporate capital tax on non-financial institutions will be phased out
over two years. The rate will be cut in half from 0.3 per cent to 0.15 per cent on Sept. 1 and eliminated entirely on Sept. 1, 2002. The move
will free up more than $100 million and leverage significant new
investment in our province. It will also bring B.C. back in line with
most of the developed world, where capital taxes are recognized as
disincentives to growth.
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To
make B.C.'s taxes more competitive, the general corporate income tax
rate will fall by three full percentage points to 13.5 per cent on Jan. 1, 2002. The government will also strive to keep the rate competitive in
the years ahead.
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To
further encourage mineral exploration, British Columbia will introduce a
new 20 per cent flow-through share tax credit. The provincial credit
will be modelled on the 15 per cent federal credit introduced in October
2000 and will be in addition to the federal credit. Companies that don't
use flow-through shares will still be able to use the existing mineral
exploration tax credit.
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To
strengthen the transportation sector, the domestic jet fuel tax rate
will be reduced from five cents to two cents per litre on Aug. 1. The
cut will bring B.C.'s domestic rate in line with the rate on
international flights, and with the rates charged by our competitors.
Government will also reduce the tax rate on aviation fuel from three
cents a litre to two cents a litre.
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On
July 31, the maximum sales tax rebates available for the purchase or
lease of eligible factory manufactured alternative fuel vehicles and
buses will increase to $1,000 from $500 for vehicles and to $10,000 from
$5,000 for buses.
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The
seven per cent tax on bunker fuel, used to run large ships, will end
July 31. This will increase the likelihood that ships visiting British
Columbia will refuel here, as well as help attract more cruise ship
business.
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In
addition, business and individuals will benefit from an increase in the
passenger vehicle surtax threshold. Effective July 31, the threshold
will be raised for the first time since 1994. Applying the surtax to
vehicles costing over $47,000 instead of $32,000 will increase the
purchasing power of individuals and businesses who need trucks,
passenger vans and other vehicles. |
