P.E.I. residents will be getting a small break in their taxes in the coming year.
The Progressive Conservatives followed through on some of their election commitments for tax reductions, raising the Basic Personal Amount for individuals from $9,160 to $10,000.
In addition, the government officially passed an increase to the low-income tax base amount, from $17,000 to $18,000 and lowered the small business tax rate by 0.5 per cent in the last days of the spring legislative sitting.
The changes will take effect as of Jan. 1, 2020. Altogether, these changes will result in a loss of revenue of $7.6 million for the provincial government.
“These provisions, taken together, will result in a single parent saving up to $202 in taxes each year and a senior couple saving as much as $215 in taxes,” wrote Finance Minister Darlene Compton in a budget statement earlier this spring.
The PCs had pledged bigger tax breaks in their platform.
The party had pledged to lower the small business tax rate to one per cent, a 2.5 per cent reduction, by January of 2020. This promise would give P.E.I. one of the lowest tax rates for small businesses in Canada.
In addition, the PCs had pledged to raise the Basic Personal Amount to $12,000 and to increase the low-income tax base amount to $20,000.
The tax cuts follow a steady pattern from recent years of Liberal budgets. Since 2016, the Basic Personal Amount has increased from $7,708 to its current rate of $9,160.
With the increases planned for January, this amounts to a 30 per cent total increase in the Basic Personal Amount.
The small business tax rate was also lowered by 0.5 per cent as part of the Liberals’ 2018 provincial budget.