December 19, 2007
For immediate release
Tax Relief for Islanders Filing 2007 Income Tax Returns
“Our government campaigned on tax fairness,” said Provincial Treasurer Wes Sheridan. “We reduced the tax on gasoline, froze owner-occupied residential assessments and increased the disability tax credit. We know that when Islanders pay less money on taxes, they have more to spend in Island stores and businesses.”
There is an increase to the basic personal tax credit Islanders can claim. In 2006, it was $7,412. This year it is increased to $7,560 and will increase again in 2008 to $7,708. Income tax brackets were increased by 2% in 2007 and will be increased by 4% in 2008 as compared to 2006 levels.
Both full- and part-time students will benefit from the doubling of the education amount on their personal income tax return.
Islanders can now split pension income with their spouse, which offers some additional tax relief. This initiative was introduced by the federal government and subsequently adopted by the provincial government.
Farmers, fishermen and small business owners will see significant tax savings as a result of the province increasing the lifetime capital gains exemption from $500,000 to $750,000.
There is also increased support to Islanders with disabilities and their families. The maximum provincial Disability amount and the Disability Supplement have both increased.
Government is continuing toward lowering the small business tax rate. It was once at 7.5%. It now stands at 4.3% and will go down to 3.2% on April 1, 2008.