The Province Fiscal Budget 2017-18 was presented on 21st February 2017 by the Ministry of Finance of British Columbia. This budget includes a number of tax measures. The short summary of this budget are given below:
With effect from 1st April of 2017, the small business corporate income tax rate would be reduced from 2.5 per cent to 2 per cent. But, the $500,000 amount allotted for small business has not changed.
The budget does not make any significant changes to the individual income tax rates. A reduced income tax rate for small business affects the personal taxation. This budget proposes some changes to some personal credits. Medical Service Premiums will be cut starting 1st January 2018, by 50 per cent for households with annual net income up to $120,000, leaving a typical family of four paying $900 a year less next year. The factor rate is reduced from 17% to 15% as a consequential amendment resulting from the change to the small-business corporate income tax rate, which uses to compute the British Columbia dividend tax credit rate on ineligible dividends. A tax credit for volunteer firefighters and search and rescue volunteers and a back-to-school tax credit have been introduced. The volunteer firefighters and search and rescue volunteers credit amount is $3,000, providing a tax benefit of up to $151.80 per qualified taxpayer. The back school tax credit amount is $250 per child, providing a tax benefit of up to $12.65 per child. The education tax credit is abolished effective from 1st January 2018.
Special tax rates for credit unions
This budget pauses the phase-out of the preferential tax treatment for credit unions. In accordance with that for the tax year 2017, a credit union will continue to receive 80% of the full preferential tax treatment. It also phases out the provincial sales tax on electricity purchases by businesses over the following two years.
Tax credits extension
This budget made an extension in the field of scientific research and research and experimental development tax credit, BC mining flow-through share tax credit, training tax credit and book publishing tax credit. The closing date for tax credit in the scientific research and experimental development sector will be on 31st August 2022. The mining exploration tax includes costs of environmental studies and community consultation in terms of mining exploration tax credit calculation. The credit is computed as 20% of eligible British Columbia mining exploration expenditures, or 30% if exploration is in the mountain pine beetle affected region. The mining flow-through share tax credit in BC is extended to the end of 2017. Tax credit in case of book publishing is prolonged to two years. The extended date will be started from 31st march 2017 to 31st March 2019. Tax credit for training purposes in BC are extended until the end of the year 2020.
Effective from 1st October 2017, the tobacco tax rate increases to 08 per cents per cigarette under Tobacco Tax Act.