Released on November 21, 2005
Saskatchewan residents will see $17.6 million in personal income tax savings next year as the government indexes Personal Income Tax (PIT) rates to the national rate of inflation.Income tax brackets and tax credits for 2006 will be set at 2.2 per cent. This is the third year running that the Province has fully indexed its rate to the national rate of inflation.
"Our government is again delivering on its commitment to provide meaningful tax relief to all Saskatchewan taxpayers in 2006," Finance Minister Harry Van Mulligen said. "This is good news for all taxpayers in Saskatchewan but especially for individuals on fixed incomes and low income earners."
Indexation protects Saskatchewan residents from 'bracket creep' where income tax credits decrease and income taxes increase as a result of inflation-based adjustments to personal income. Full indexation means a single pensioner receiving $25,000 in annual pension income will pay about $32 less in Saskatchewan income tax in 2006 than the previous year.
The income tax brackets, basic and spousal credits, senior supplement, dependent child credit, age credit, disability-related credits, medical expense credit and the Saskatchewan Sales Tax Credit are all subject to indexation.
"Positive economic circumstances give us the ability to address certain pressures and priorities," Van Mulligen said. "Our government remains committed to protecting Saskatchewan taxpayers from inflation and bracket creep."
In 2004, the income tax system was automatically indexed to the national rate of inflation. In the 2004-05 Budget, the government announced the indexation rate for each subsequent tax year would be determined each fall. This initiative was introduced to strike a balance between protecting taxpayers and managing the province's fiscal pressures.
In 2005, the Government of Saskatchewan implemented full indexation at 1.7 percent, saving taxpayers $13.6 million for the 2005 tax year.
The inflation-based indexation adjustment is determined from the annual change in the national Consumer Price Index. For the 2006 tax year, the indexation factor is 2.2 per cent.
"This government works to ensure taxes in Saskatchewan are as fair and competitive as possible," Van Mulligen said. "Sensible tax reform makes living in the province more affordable and more attractive, while continuing to support the essential services Saskatchewan people value."
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For More Information, Contact:
| Vanessa Gooliaff Beaupre Finance Regina Phone: (306) 787-8109 |