It's official. On December 1st, Manitoba became the first province with a zero per cent small business tax rate. Thanks to effective lobbying from CFIB and your involvement, the rate has been declining for years and now it is officially at zero.No, that doesn't mean that people can now shelter their incomes behind the corporate seal. That money will still be taxed when passed to individuals in form of dividends, wages or benefits. (Plus, let's not forget the 11% Federal small business tax that will still apply.) Still, that's a significant help for the province's small businesses:
In 1999, Manitoba had a tax rate of 8 per cent - the second highest in the country. Today it's the lowest.Several years ago, New Brunswick was on its way towards achieving a 1% small business rate by July of 2007. But then came Shawn Graham, who hiked the rate to 5%, as a prelude to boosting program spending. Now, amid all the deficits his government left behind, New Brunswick entrepreneurs are unlikely to see the small business rate going back to 1%, let alone being eliminated completely. The most that the new government promises is to reduce it to 2.5% by 2014.
"It's a significant saving for small business owners," said Rosann Wowchuk, Manitoba's Finance Minister and the province's Deputy Premier. "We pleased to be taking a lead in the country."
“This move is about supporting entrepreneurship. It allows small businesses to keep more of their profits and reinvest in their companies, their employees and their communities," said Catherine Swift, president of the CFIB.