The Spring Budget of the Liberal BC government fell on the sword of the change in government from the recent provincial election. The new government properly addressed this issue by delivering an interim Budget in advance of the traditional Spring Budget next season.
Following the Feds, various small credits re arts and fitness pursuits will be abandoned after the 2017 tax year.
Anew one-off child tax credit of $250 will exist for 2017 only, worth approximately 2 visits to Starbucks.
Governments seem to love small business these days! The new government embraced the Spring Budget initiative of lowering the small business corporate tax rate from 2.5% to 2%, effective April 1, 2017.
However, the general corporate rate applicable to “Big” business and passive corporate income rises from 11% to 12%, effective January 1, 2018.
It has been a relief to see in recent years that government Finance Departments finally understood the importance of sustaining the integration of corporate tax rates with the concomitant dividend tax credit system inherent in shareholder taxation.
Effective from calendar year 2017, dividend tax credits for ineligible dividends will reduce from 2.47% to 2.18%.
Effective from calendar year 2019, dividend tax credits for eligible dividends will increase from 10% to 12%.
PERSONAL TAX RATES
Presently, the top BC personal tax rate is 14.7% on taxable income above $108,460. Effective from 2018, a new, higher rate of 16.8% will kick in from $150,000.
BC follows the earlier Federal initiative of giving tax credits to certain sectors of volunteerism: specifically volunteer firefighters and search and rescue service. The provincial credit is $3,000, worth $152 pa.
MEDICAL SERVICES PREMIUMS
With the backdrop of health care costs being one of the largest items in public finance, and with no incentives to healthy life style, MSP premiums have been dropped by 50% effective from 2018, with the promise of being free to all in the near future.