Small Business owners in Saskatchewan can look forward to the new year knowing they'll have the highest income threshold in Canada.
The provincial government announced that they are increasing the income threshold for small businesses while also lowering the personal tax rate.
Brian Miller is the Manager/Public Relations for the Ministry of Finance and explained what the new income threshold would mean for small businesses in the province.
"So it's a good incentive for all the small businesses in the province," he said. "What that means is they have a higher income threshold in which they are taxed at a lower rate. Effective January 1st that went up from $500,000 to $600,000. The small business income threshold is the amount of income up to which small business pay tax at the much lower percent small business tax rate."
As for the lower personal taxes, they were introduced in July of last year, but this will be the first full year with the lower personal tax rate.
Miller said that the lower rates should help the province and the people in it.
"Well lower personal taxes help attract jobs, and they attract people to our province by improving Saskatchewan tax competitiveness," he said. "We are in a pretty good period right now for people coming to Saskatchewan, so we're hoping that's going to help contribute to that continuing."
Miller noted that the lower rates are expected to lead to over $120 million in savings for taxpayers.
"Well i think there's the recognition that small business is one of the key drivers of the economy," he said. "So this certainly small business threshold increase is going to increase that, and I think that the fact personal taxes are going down helping small business attract employees is going to help as well so its all good news."
This change to the Income Tax Act builds on the governments decision in 2011 to reduce the small business tax rate from 4.5% to 2%. This will have saved smal businesses over half a billion dollars (about $80 million per year) by the end of 2017.
Saskatchewan Personal Income Tax rates will drop by another half point on July 1, 2019.