SASKATCHEWAN TO EXAMINE INCOME TAX REFORM

Released on May 6, 1999

Finance Minister Eric Cline today announced establishment of the

Tax Review Committee.



Named to the committee were Jack Vicq, Professor of Accounting at the

College of Commerce, University of Saskatchewan; Charlie Baldock, Tax

Partner with KPMG in Regina; and Shelley Brown, Managing Partner of

Ernst & Young in Saskatoon. Vicq will serve as chair of the

committee.



"This government is committed to reduced taxation," Cline said. "We

will continue to reduce taxes on an affordable basis, as we have done

every year since balancing the budget."



"We made a commitment in this year's budget to consult with

Saskatchewan people on how we can make the personal income tax system

simpler, fairer, more competitive and more responsive to peoples'

needs. We are honouring that commitment. The committee's mandate is

to consult with stakeholders and the general public on whether a

change to a system of tax on income could contribute towards meeting

these objectives."



Under the current system, provincial income tax is calculated as a

percentage of federal tax. In December, 1997 the Federal Government

agreed that provinces could be permitted to levy personal income tax

directly on taxable income. This is commonly referred to as a system

of tax on income.'



In October, 1998 Finance Ministers accepted a preliminary

framework under which a system of tax on income could be

implemented.



Cline emphasized the committee's focus will be on examining

alternative personal income tax systems using the tax on taxable

income concept.



"It may not be well understood that a tax on income does not

automatically mean a flat rate of taxation, such as Alberta has

proposed. These are two very separate decisions that need to be

made.



"First, we need to decide whether to move to a new system of

taxation. Then, as a second question, we need to decide what

such a system should look like. The mandate of the committee is

first to report to me on whether a tax on taxable income can

contribute substantially towards a system of taxation that is

simpler, fairer and more competitive. Secondly the committee

will provide advice on the components of a tax on income."



The committee will seek input from business, labour and other

groups. Public meetings will also be held in every region of the

province. The committee is to present a report to the minister

in November, 1999. It's expected the report will be released to

the public in December.



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For more information, contact:

Sandra Lodoen

Saskatchewan Finance

Regina

Phone: (306) 787-6578