News Release Archive

FINANCE--Bill To Amend The Province's Capital Tax
Finance Minister Bill Gillis introduced a bill to plug a possible
tax loophole on the province's new capital tax. 

"We tried to make the new capital tax as simple as possible,"
said the minister, "but, the tax lawyers tell us we need to make
one section a little clearer."

The one paragraph bill makes it clear that large corporations
will not be allowed to deduct other tax credits when they
calculate how much capital tax they must pay. 

"By introducing this amendment, we head off any loss of taxes and
make the original intent crystal clear," said Dr. Gillis.

The capital tax on large corporations was introduced last spring
for corporations with a tax year that began after March 31, 1997.
It was applied to companies with taxable capital in excess of 
$5 million. The impact is phased in for taxable capital between 
$5 million and $10 million. After $10 million the full impact of 
0.25 per cent of taxable capital is paid. Where provinces levy 
this kind of tax, this is the lowest rate in Canada. The tax is 
now expected to raise approximately $40 million per year for five 
years when it will end.

Contact: Bruce Cameron 
         Department of Finance
         902-424-8787 or 902-499-8849 (cellular) 

sab                     Nov. 24, 1997           7:23 p.m.