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28 February 2022 Canada: Prince Edward Island issues budget 2022/23 On 24 February 2022, Prince Edward Island Finance Minister Darlene Compton tabled the province’s fiscal 2022/23 budget. The budget contains tax measures affecting individuals and corporations. The Minister anticipates a deficit of CA$26.5m1 for 2021/22 and projects a deficit of $92.9m for 2022/23, followed by further reduced deficits for each of the next two fiscal years ($51.9m for 2023/24 and $32.1m for 2024/25).
*** The 2021 federal budget proposed to temporarily reduce the federal corporate income tax rate for qualifying zero-emission technology manufacturers by 50% (i.e., to 7.5% for eligible income otherwise subject to the 15% general corporate income tax rate or 4.5% for eligible income otherwise subject to the 9% small-business corporate income tax rate), applicable for taxation years beginning after 2021. The reduced tax rates are proposed to be gradually phased out for taxation years beginning in 2029 and fully phased out for taxation years beginning after 2031.
For taxable income in excess of $100,392, the 2022 combined federal-PEI personal income tax rates are outlined in Table C.
** The federal basic personal amount comprises two elements: the base amount ($12,719 for 2022) and an additional amount ($1,679 for 2022). The additional amount is reduced for individuals with net income in excess of $155,625 and is fully eliminated for individuals with net income in excess of $221,708. Consequently, the additional amount is clawed back on net income in excess of $155,625 until the additional tax credit of $252 is eliminated; this results in additional federal income tax (e.g., 0.38% on ordinary income) on net income between $155,626 and $221,708. The budget proposes to increase the basic personal income tax exemption to $12,000 from $11,250 as of 1 January 2023. The budget proposes to increase the rate of the rebate of the provincial component of the Harmonized Sales Tax for charities and non-profit organizations to 50% from 35% as of 1 January 2023. The budget proposes the introduction of a new tax on vaping products, but no details were provided in the budget documents. The budget also proposes an increase on tobacco taxes, but no details were provided in the budget documents. Lastly, the budget proposes an increase, effective 31 March 2022, in the carbon levy on the carbon-based fuels that are currently taxed, but no details were provided.
Document ID: 2022-5211 | ||||||||||||||||||||||||||||||||||||
