BC Budget 2008

Summary

The 2008 BC Budget joined the corporate tax reduction train and, effective July 1, 2008, will drop each of the small business and general corporate tax rates by 1%. This will bring the overall small business rate down by the end of 2008 to a historically-low 14.5% (from 17.62%), and the general rate will be 30.5% (from 34.12%).

The BC dividend tax credit system also will change sympathetically to these lower corporate rates. For 2009, the dividend tax credit for ineligible dividends will be 4.2% (from 5.1%) and for eligible dividends will be 11% (from 12%).

BC personal tax rates are on a schedule to be dropped three years in a row from 2006 through 2009. The 2008 plan drops the rate significantly at all marginal tax brackets except the top one, which remains unchanged. The 2009 plan will drop the rate a little bit at the two lowest tax brackets only, leaving the higher three unchanged.

Article originally published: Mar 2008