Canada’s Tax System

Levels of the tax system of Canada Canadian tax system under current conditions is presented in three main levels: Federal (48% of government revenues); provincial (42% of government revenues); local (10% government revenues). The main part of the federal budget is personal income tax, the percentage of its constantly increasing. During 1985-1994, the proportion of income tax increased by 45% (from 56,580 million to 101,943 million Canadian dollars). Significant and receipts from corporation tax, tax on goods and services, excise, customs duties and taxes in the social insurance funds. Tax revenue sources provinces consist of: * Income tax; * sales tax * tax on corporate profits, excise tax * * taxes in the social insurance funds; * gift tax, rent payments * * various registration and licensing fees. The main share of earnings yield income tax and indirect taxes.

Tax revenues of local budgets are composed of real estate tax and tax on business. The country has developed a clear system of tax Regulation: Tax policy is developed department of fiscal policy and economic analysis of the Ministry of Finance. All projects submitted for discussion – particularly in the House of Commons. Collection of taxes involved in Ministry of national income. All disputes concerning the taxation allows the Tax Court.

Individual provinces are made exceptions. For example, Quebec independently collects income tax and tax on income, Ontario, Alberta – a tax on profits. The main acts in the sphere of tax legislation are: the Law on Income tax (regulating the collection of income tax and corporation tax) and Insurance Act unemployment benefits (social security). Modernization of the tax system the first stage of modernization of the tax system in Canada has tax reform, begun in 1987, she touched the two major revenue items of the budget: income tax and profits tax. In what was carried out a radical overhaul of indirect taxes. Gains tax on the market value of great importance in the personal income tax has gains tax on market value of assets. Whereas previously, only half of that income subject to taxation, and the real rate of total federal – provincial tax equal to 26% at the present time taxable percentage increased to 75%, while the effective tax rate to increase the market value increased to 30%. Income tax expense significant role played by income taxes and related various tax breaks that encourage company to the management of assets and capital, introduction of R & D development activities in certain areas and other socially useful activities.


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