2023 Federal Budget Sneak Peek: Possible Tax Changes
Introduction
The 2023 Federal Budget includes several proposed tax measures that could significantly impact individuals and businesses. This article provides a sneak peek into these changes, based on the information available in the Budget annex and Notices.
Individual Income Tax Changes
Increase in Minimum Federal Tax
The Budget proposes increasing the individual federal minimum tax rate from 15% to 20%. This change aims to ensure that high-income earners pay a minimum level of tax, regardless of deductions or credits.
Corporate Tax Changes
Extension of Accelerated Investment Incentive
The Budget announces the extension of the Accelerated Investment Incentive (AII) until 2024. This measure allows businesses to deduct a higher percentage of capital costs in the year they are incurred, encouraging investment and economic growth.
Other Tax Measures
In addition to the individual and corporate tax changes, the Budget also includes several other tax measures, including:
- Elimination of the Canada Emergency Response Benefit (CERB) and Canada Recovery Benefit (CRB) repayment loans
- Introduction of a tax credit for home renovations
- Changes to the tax treatment of capital gains on the sale of principal residences
Impact on Taxpayers
The proposed tax changes will have varying impacts on taxpayers. Higher-income earners may see a modest increase in their tax liability due to the increase in the minimum tax rate. Businesses, on the other hand, may benefit from the extension of the AII, which could lead to increased investment and job creation.
Conclusion
The tax measures proposed in the 2023 Federal Budget are still subject to parliamentary approval. However, the sneak peek provided by the annex and Notices offers insight into the potential changes that could impact taxpayers in the coming years.
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