Small business tax cut not enough, overhaul needed: St. John's Board of Trade
The St. John's Board of Trade says the federal government's move to drop the tax rate for small businesses isn't enough, and does little to address the many questions and concerns business owners have about the Liberal tax plan.
On Monday, Finance Minister Bill Morneau announced the small business tax rate will drop from 10.5 per cent to nine per cent by 2019. The news came after weeks of protest that other tax changes will unfairly hurt small business owners.
The 1.5 per cent drop is a step in the right direction, according to Nancy Healey, CEO of the St. John's Board of Trade. But she said for someone with a $500,000 income, it would only mean a saving of $7,000 a year.
"We've got a lot more making up to do yet," she told the St. John's Morning Show.
"It's insignificant and insufficient. The changes that they proposed back in July are still one of the most pervasive and harming to small business and we're still waiting for more changes to be announced."
One of those other tax changes includes restricting "income sprinkling," when income is transferred from a business owner to a family member who would be taxed at a lower rate.
Healey said those kind of tax changes can have a detrimental effect on businesses who have played by the rules of the current tax act for years.
Calls for simplified tax act
She said the Board of Trade is calling for an independent review or Royal commission into the current tax act to see if things can be simplified and create more certainty for business owners.
"Our tax act was built for the 20th century. We're in the 21st century now. It's time we updated it."
Healey said that more than 70 per cent of the country is working for small businesses. Instead of making small changes to the already complex tax act, she would like to see the federal government focused on tackling its more than $652-billion debt.
"This has all been a charade over the last three months, to distract Canadians from the real problem that the government of Canada has, which is massive debt," she said.
"They don't need to raise more revenue, they've got to cut their spending."