Tax cut good news for small businesses

Small-business corporate income tax rate to drop from 2.5 to 2 per cent

Tax cut good news for small businesses

Small-business owners in B.C. will benefit from a cut to the small-business corporate income tax rate from 2.5 to 2 per cent, retroactive to April 1 this year.

The tax cut is part of the Budget Measures Implementation Act which was passed on November 2 and makes B.C.’s small-business corporate income tax rate the second lowest in Canada, tied with Alberta and Saskatchewan.

Kitimat Chamber of Commerce chair Wendy Kraft said the chamber is very happy with the government’s decision to lower taxes.

“Small business is a big part of our economy and the backbone of many communities. Small business struggles in our community as it relies heavily on large industry and their employees to support them,” said Kraft.

She added that the economic slowdown in the community has definitely had an impact on many small businesses.

“Now that they can benefit from lower taxes they will be better able to keep employees working and their doors open,” said Kraft..

101 Industries’ general manager Thom Meier said while he hadn’t reviewed the tax changes in depth, offering tax relief and incentives to small business is always a good thing.

“It’s nice to see that Horgan recognizes the value of small business in B.C,” said Meier.

However, he said more should be done by government to ease the burden on small businesses in the province.

“There is a lot of cumbersome red tape in government especially in respect to PST. It is a cumbersome, difficult system to manage and understand,” added Meier.

He said tax regimes currently in place rarely seem to offer true incentives to business to encourage reinvestment.

“Sweeping tax reform and a movement to a harmonized tax would offer the best benefit, in B.C., to consumers and businesses,” said Meier.

He is in favour of a harmonized sales tax which he believes is a more equitable system of taxation.

Speaking about the tax rate cut, premier John Horgan said recent figures released indicate small businesses are showing strong signs of growth.

“Small businesses are the economic engines of B.C.’s communities and create jobs for people throughout the province,” said Premier Horgan. “We’re working hard to make sure that small businesses and manufacturers have the support they need.”

He said in addition to the tax rate cut, the province would also be establishing a Small Business Task Force to help strengthen and grow the sector in B.C.

The Small Business Profile 2017 report shows that employment in B.C.’s small-business sector grew faster in 2016 than at any time in the past decade, with more than one million people employed in small businesses last year.

Small businesses produced more than one-third of provincial GDP in 2016 and $15.8 billion in exports in 2015, an increase of nearly $3 billion over the previous year.

The latest numbers show British Columbia leads the country in growth in the number of new small businesses and has the highest number of small businesses per capita across Canada, with small business making up 98 per cent of all businesses in the province.