Released on December 3, 2008
The Saskatchewan Legislature today passed the largest single-year personal income tax cut in the province's history.
"This fall, Premier Wall announced this historic tax cut as one key component of our government's plan to share in the benefits of our growing economy with Saskatchewan people," Finance Minister Rod Gantefoer said. "This important piece of legislation we have passed today benefits every income tax filer in Saskatchewan."
Lower taxes will come in the form of increased personal exemptions - the amount of money a person can earn before starting to pay income tax. The Basic Personal Exemption and the Spousal Exemption will each increase by $4,000 to $12,945 - the second-highest personal exemption amount in Canada.
This increase is retroactive for the 2008 taxation year. About 80,000 Saskatchewan taxpayers will be removed from the income tax rolls all together.
The Child Tax Credit amount will also increase by $2,000 per child to $4,795 - also retroactive to the 2008 taxation year - to assist families with the costs of raising children.
These tax measures will mean a tax savings of $440 per year for an individual or $1,320 per year for a working family with two children.
"A working family with two children can now earn up to $41,300 before they start to pay any provincial income tax," Gantefoer said. "That's the highest level of any province and another reason why Saskatchewan is the best place in Canada to earn a living and build a life."
The new Low-Income Tax Credit was also passed today. This credit replaces and significantly increases the Saskatchewan Sales Tax Credit and will assist lower income residents, many of whom pay no provincial income tax such as seniors and students.
Basic and spousal tax credits will increase to $216 per person, and $84 per child for up to two children, retroactive to July 2008. Maximum tax credits provided to eligible families with children will increase to $600 per year.
This initiative is a fully refundable tax credit that will continue to be delivered by the Canada Revenue Agency in co-ordination with the quarterly Goods and Services Tax Credit. The new Low-Income Tax Credit will benefit about 300,000 Saskatchewan residents.
Together, the income tax reduction and the new Low-Income Tax Credit will save Saskatchewan taxpayers over $300 million a year.
"Even after these tax cuts, our government will pay down the provincial debt by about $2.6 billion this year, and we will continue to maintain a $2 billion cash reserve in case it is needed to deal with the current economic turmoil," Gantefoer said. "We are taking a balanced approach to tax reduction, investment in infrastructure and sound fiscal management."
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For more information, contact:
Vanessa Beaupre
Finance
Regina
Phone: 306-787-8109
Email: vanessa.beaupre@gov.sk.ca