Today, Premier and Finance Minister Sandy Silver tabled the Budget Measures Implementation Act, 2020 to ensure Yukon’s private sector can continue to flourish.
Bill No. 8 proposes to reduce the small business tax rate from two per cent to zero. The rate change is expected to save Yukon businesses approximately $2 million per year.
The Bill also expands the eligibility for the Business Investment Tax Credit to encourage additional investment in Yukon businesses.
Proposed income tax changes would result in Yukoners saving roughly $2.4 million in taxes per year – up to $9.6 million total – by 2023. The changes are geared towards low and middle-income earners and would align with recent adjustments made by the Government of Canada.
Bill No. 8 would also modernize and simplify the Insurance Premium Tax Act to bring rates in line with the rest of Canada.
Our government is working hard to make life more affordable for Yukoners. This Bill delivers on two significant commitments we made to Yukon businesses and puts more money in the pockets of those who need it most. Cutting taxes and supporting investment in local businesses will encourage a stronger private sector and generate new economic opportunities in our territory.
Premier and Minister of Finance Sandy Silver
The Small Business Tax Rate would decrease from two per cent to zero, effective January 1, 2021.
In 2017, the Government of Yukon changed the Small Business Tax Rate from three per cent to two per cent, saving Yukon small business a total of approximately $1 million a year.
The Small Business Investment Tax Credit would undergo the following changes:
- New title: Business Investment Tax Credit.
- Per company limit would change from $800,000 in any year to $4 million in any rolling four-year period.
- Maximum company size limit would change from $25 million in assets to $100 million until 2023.
- Test of 50 per cent of payroll in Yukon reduced to 25 per cent.
- Test of 50 per cent of assets in Yukon replaced with headquarters test.
The insurance premium tax rate would change from two distinct rates (two per cent for most insurance, three per cent for fire insurance) to a single rate of four per cent effective January 1, 2021.