July 4, 2000
For immediate release
Provincial Income Tax Measures Take Effect July 1
"My government has achieved our commitment to put the Province's finances in order and I take great satisfaction in seeing that success returned to Islanders through their paycheques," said Minister Mella.
The Provincial Budget announced the Province's second consecutive reduction in the Personal Income Tax rate, combined with full adoption of the federal tax base changes and a new Low Income Tax Reduction program.
The provincial rate reduction from 58.5 per cent to 57.5 per cent applies back to January 1, 2000, and accordingly payroll withholdings fall to 56.5 per cent on July 1 to put employees on track for a full year of lower taxes. In addition, federal base reductions apply from July 1, and so will provide significant savings to tax payers.
The Low Income Tax Reduction will be available as an income tax refund on filing returns next year, rather than a change in payroll deductions. It provides benefit for a total of 17,200 Island families and will eliminate provincial income taxes entirely for some 4,860 individuals and families.
Minister Mella noted, "The Prince Edward Island economy is stronger than it has ever been and it is only right that Islanders should benefit from their own hard work."