Finance Minister Jim Flaherty’s federal budget tabled today forecasts a deficit of $40.5 billion for 2011, falling to $29.6 billion in 2012 and to $19.4 billion in 2013. The Minister essentially forecasts a balanced budget in 2015.
Although there were no changes in the corporate, personal, or GST tax rates, the budget did include several measures to tighten the tax base, including the ending of partnership tax deferrals for corporate partners, new rules to restrict the exemption from capital gains tax on the donation of flow-through shares and new rules for individual pension plans and RRSP anti-avoidance rules. The budget also includes changes to the regulatory rules that apply to the charities sector.
The Finance Minister signaled strong and continuing commitment to the Next Phase of Canada’s Economic Recovery with a “low tax plan for jobs and growth…and return to balanced budgets in the medium term.” The budget identifies the “number one priority of Canadians — securing our economic recovery”.
While there are numerous tax and non-tax measures focused on targeted sectors of the economy, the budget does not introduce any major new programs or spending initiatives. This is entirely in keeping with the overarching theme of staying on track with the direction set out at the beginning of the recession.
The budget does signal the government’s intention to pass the torch to the private sector to continue to drive job creation through its commitment to stable, low tax environment to foster business investment and growth. The $60 billion in extraordinary spending initiatives undertaken over the last two years will be wound down “as planned on March 31, 2011”.
The budget calls for the elimination of the federal deficit at the end of five years, principally achieved through targeted reductions in program spending — those identified through the 2010 strategic reviews, and through a continuing crackdown on what the government considers to be “tax loopholes”.
Further spending cuts expected to come from a new round of Strategic and Operating Reviews are not counted in the deficit reduction targets, and could lead to a balanced budget possibly earlier than planned.
Details of tax highlights in the budget as well as fiscal measures of interest to business are as follows.
Business Tax Changes
Corporate Partnership Tax Deferral
The budget proposes to limit the deferral opportunities for corporations (other than professional corporations) with significant interests in partnerships that have a fiscal period different from the corporation’s taxation year.
The proposed measure will require the corporation to include not only the income of the partnership for the taxation year that ends in the corporation’s taxation year, but also to accrue partnership income for a stub-period of the partnership’s subsequent taxation year which begins in the taxation year and ends in the following one.
Stub-period income is reversed the following taxation year and a new stub-period income is then calculated and included in income. Affected partnership interests are those where a corporate partner, together with affiliated and related parties, is entitled to more than 10% of the partnership’s income (or assets in the case of a wind-up) at the end of the last fiscal period of the partnership that ended in the taxation year.
These measures could result in the inclusion of significant incremental partnership income for a corporation’s first taxation year ending after March 22, 2011. To mitigate the potential cash-flow impact of accruing a partnership’s stub-period income, transitional relief will be available to recognize the incremental amount gradually over the five taxation years that follow the corporation’s first taxation year that ends after March 22, 2011.
The partnership’s stub period accrual can be calculated using a formula that essentially pro-rates the partnership income for the taxation year that ended in the corporation’s taxation year. Alternatively, the corporation will able to designate an amount as the stub period accrual but, should the corporation underestimate this stub-period income, an income adjustment will need to be added to the corporate partner’s income for the subsequent taxation year equal to the shortfall multiplied by a prescribed interest rate (this income adjustment can be viewed somewhat like a penalty but is considered income to the partnership).
A corporate partner will be able to elect to reduce the amount of its stub period accrual by its share of “designated resources expenses” (Canadian exploration, development, oil and gas property expense and foreign resource expenses) incurred by the partnership in the stub period. Written confirmation of these expenses will need to be provided by the partnership and this information will have to be filed with the corporation’s tax return for the year in which these expenses are claimed.
Because some partnerships may wish to change their fiscal period as a result of these measures, a one-time written election to do so will generally be available where all members of the partnership are corporations other than professional corporations. This election will be possible for fiscal periods of partnerships that end after March 22, 2011 and no later than the last day of the partnership’s first taxation year that ends after this date.
Finally, the government feels that the stub-period accrual approach described above does not address well the tax deferral that arises in multi-tiered partnerships with different taxation year-ends. Consequently, partnerships that are part of a tiered partnership structure will be required to have the same fiscal period, whether or not this fiscal period aligns with the taxation year of any of its corporate partners. The partnerships will be allowed, on a one-time basis, to choose a common fiscal period by filing a written election.
The elected fiscal period will have to end before March 22, 2012 and must be no more than 12 months in duration. If no election is filed, the common fiscal period of the partnerships will end on December 31, 2011 and every December 31 thereafter. Modified stub-period income accrual rules and transitional relief are provided for the multi-tiered partnerships.
Accelerated CCA for Manufacturing and Processing Equipment
Currently, machinery and equipment acquired by a taxpayer after March 18, 2007 and before 2012 is eligible for a temporary capital cost allowance (CCA) rate of 50% on a straight-line basis, subject to the half-year rule under Class 29.
This temporary CCA is extended for two years, and will now apply to equipment acquired before 2014.
Accelerated CCA for Clean Energy Generation Equipment
Currently, Class 43.2 provides accelerated CCA for specified clean energy generation and conservation equipment at a rate of 50% per year on a declining balance basis.
The budget expands Class 43.2 to include equipment that is used by the taxpayer or by a lessee of the taxpayer, to generate electrical energy in a process in which all or substantially all of the energy input is from waste heat.
This measure will apply to eligible assets acquired on or after March 22, 2011 that have not been used or acquired for use before that day.
Qualifying Environmental Trusts
Special rules for qualifying environment trusts (QETs) exist because of regulatory regimes under which the operator of a mine, quarry or waste disposal site may be required to pre-fund, by means of a trust, the costs of reclaiming or restoring a site.
The budget proposes to expand the range of trusts eligible for QET treatment to include trusts that are required to be established in the context of pipeline abandonment.
The budget proposes to include trusts that are created after 2011 and mandated by order of a tribunal constituted by a law of Canada or a province. These changes will apply to the 2012 and subsequent taxation years for trusts created after 2011.
The budget proposes to expand the range of eligible investments for QETs to include certain debt obligations.
The budget also proposes to set the rate of tax payable by a QET to the corporate income tax rate that applies for 2012 and subsequent tax years.
Intangible Capital Expenses in Oil Sands Projects
Oil sands properties
The budget proposes that the cost of oil sands leases and other oil sands resource property be treated as Canadian oil and gas property expense (COGPE) eligible for deduction at 10% per year. (Currently, the cost of acquiring oil sand leases and other oil sands resource property can generally be treated as Canadian development expense (CDE), which is deductible at a 30% rate per year on a declining balance basis.)
This budget measure is effective for acquisitions made on or after March 22, 2011. Proceeds from the disposition on or after March 22, 2011 of a taxpayer’s oil sands resource property will be applied to reduce the taxpayer’s cumulative CDE or cumulative COGPE, consistent with the manner in which the cost of the property was treated by the taxpayer when acquired.
Pre-production development expenses of oil sands mines
Currently, development expenses incurred for the purpose of bringing a new oil sands mine into production in reasonable commercial quantities are treated as Canadian exploration expense (CEE), which can be deducted in full in the year incurred. The budget proposes that these expenses be treated as CDE thus eligible for a deduction of 30% per year on a declining balance basis.
Certain transitional relief is provided for pre-production development expenses. This change will also apply to pre-production expenses in respect of oil shale mines.
Stop-Loss Rules on Share Redemptions
Finance notes in the budget that some corporations have been entering into “tax avoidance arrangements” that rely on the existing exceptions to the stop-loss rules to claim a double deduction on the redemption of shares.
As a result, the budget proposes to extend the application of the stop-loss rules to any dividend deemed to be received on the redemption of shares held by a corporation (whether the shares are held directly or indirectly through a partnership or trust), other than dividends deemed to be received on the redemption of shares of the capital stock of a private corporation that are held by a private corporation (other than a financial institution) whether directly or indirectly through a partnership or trust (other than a partnership or trust that is a financial institution).
This budget measure will apply to redemptions that occur on or after March 22, 2011.
Employee Profit Sharing Plans (EPSPs)
Finance notes that EPSPs are increasingly used as a means for some business owners to direct profit participation to members of their families with the intent of reducing or deferring taxes on the profits. Further, EPSPs are used to avoid paying Canada Pension Plan contributions and Employment Insurance premiums.
Finance says that it will review the existing EPSP rules to determine whether technical amendments are required to ensure that they continue to be a useful vehicle for employers and are used for their intended purpose. Before proceeding with any proposals, Finance will undertake consultations to seek stakeholder views.
Personal Tax Changes
Donation of publicly listed flow-through shares
Individuals generally receive an exemption from capital gains tax when they donate publicly listed securities to charity. In general terms, the budget disallows the exemption from capital gains tax on donations of shares of a class in which a taxpayer acquired shares issued pursuant to a flow-through share agreement entered into on or after March 22, 2011, except to the extent that cumulative capital gains from dispositions of shares of that class exceed the original cost of the flow-through shares.
Flow-through shares are treated as having a cost of zero for the purpose of calculating any gain or loss on their disposition. As a result, when an investor holding only flow-through shares sells them, the full amount of the proceeds received is recognized as a capital gain for tax purposes.
The budget proposes that if a share, or a right to acquire a share of a particular class of the capital stock of a corporation (i.e., a flow-through share) is issued to a taxpayer under a flow-through share agreement entered into on or after March 22, 2011, the exemption from capital gains tax on donations of publicly listed securities will be available for a subsequent donation by the taxpayer of a share of that class only to the extent that the capital gain on the donation exceeds a threshold amount (the exemption threshold) at the time of the donation.
The proposed rules will apply as well to a right to acquire a share of that class and to any other property that is identical to the share or right.
Individual Pension Plans
Defined benefit Registered Pension Plans (RPPs) are sometimes established for one individual, generally an employee of a corporation that he or she controls. Sometimes a spouse or other family member is also a member of such an individual pension plan (IPP).
The budget proposes that annual minimum amounts will be required to be withdrawn from IPPs, similar to current minimum withdrawal requirements from Registered Retirement Income Funds (RRIFs), once a plan member reaches age 72.
It is proposed that the requirement for these RRIF-like withdrawals apply to 2012 and later years. For those IPP members who reached 72 years of age in 2011 or earlier, the required withdrawals will start in 2012. For those IPP members who attain 72 years of age after 2011, the required withdrawals will start in the year in which they attain 72 years of age.
The budget also proposes that contributions made to an IPP that relate to past years of employment will, in effect, be required to be funded out of a plan member’s existing Registered Retirement Savings Plan (RRSP) assets or by reducing the individual’s accumulated RRSP contribution room before new deductible contributions for the past service may be made.
This measure will apply to IPP past service contributions made after March 22, 2011.
For this purpose, an IPP will be a defined benefit RPP:
- With three or fewer members, if at least one member is “related” for tax purposes to an employer that participates under the pension plan, or
- That is a designated plan, if it is reasonable to conclude that the rights of one or more members under the plan exist primarily to avoid this new definition.
Tax on split income
The Income Tax Act contains a number of rules intended to reduce the ability of a higher-income individual to split taxable income inappropriately with lower-income individuals. One of these rules, the “tax on split income”, limits income-splitting techniques that seek to shift certain types of income from a higher-income individual to a lower-income minor.
This income generally comprises taxable dividends from unlisted corporate shares and income from a partnership or trust derived from providing property or services to a business carried on by a person related to the child.
The budget proposes to extend the tax on split income to capital gains realized by, or included in the income of, a minor from a disposition of shares of a corporation to a person who does not deal at arm’s length with the minor, if taxable dividends on the shares would have been subject to the tax on split income. Capital gains that are subject to this measure will be treated as dividends and therefore will not benefit from capital gains inclusion rates and will not qualify for the lifetime capital gains exemption.
This measure will apply to capital gains realized on or after March 22, 2011.
Mineral Exploration Tax Credit
Flow-through shares allow companies to renounce or “flow-through” tax expenses associated with their Canadian exploration activities to investors, who can deduct the expenses in calculating their own taxable income. The mineral exploration tax credit is an additional benefit, available to individuals who invest in flow-through shares, equal to 15% of specified mineral exploration expenses incurred in Canada and renounced to flow-through share investors.
The budget proposes to extend eligibility for the mineral exploration tax credit for one year, to flow-through share agreements entered into on or before March 31, 2012. Therefore, for example, funds raised with the credit during the first three months of 2012 can support eligible exploration until the end of 2013.
RRSPs — Anti-avoidance rules
The budget enhances existing RRSP anti-avoidance rules to address concerns regarding the use of RRSPs in certain tax planning schemes.
The budget introduces rules similar to the following anti-avoidance rules that currently apply to Tax-Free Savings Accounts (TFSAs):
- The advantage rules
- The prohibited investment rules
- The non-qualified investment rules
The budget introduces a “prohibited investment” concept for RRSPs, based closely on the TFSA prohibited investment rules. Under this concept, a special tax equal to 50% of the fair market value of the investment will apply to RRSP holder on acquisition of a prohibited investment by his or her RRSP.
The tax will generally be refunded if the investment is disposed of from the RRSP by the end of the year following the year in which the tax applied, unless the RRSP holder knew or ought to have known that the investment was a prohibited investment when it was acquired.
The budget also modifies certain tax rules that apply when an RRSP acquires a “non-qualified investment”. These modifications are based on rules that are already in place for TFSAs.
Subject to two exceptions, these new provisions will apply to transactions occurring, and investments acquired, after March 22, 2011.
Children’s Arts Tax Credit
The budget introduces a 15% non-refundable tax credit for eligible amounts up to $500 per year per child. The credit is available for fees paid for the enrolment of a child under 16 years old at the beginning of the year in an eligible program of artistic, cultural, recreational or developmental activities. The credit applies to eligible amounts paid in 2011 and later years.
If the child is eligible for the Disability Tax Credit and is under 18 years old at the beginning of the year, the 15% non-refundable tax credit may be claimed on an additional $500 disability supplement amount when a minimum of $100 is paid on eligible expenses.
An eligible activity must be a supervised activity suitable for children. Eligible activities include activities that: contribute to the development of creative skills or expertise in an artistic or cultural activity, provide a substantial focus on wilderness and the natural environment, help children develop and use particular intellectual skills, include structured interaction among children where supervisors teach or help them develop interpersonal skills, or provide enrichment or tutoring in academic subjects.
An eligible program must be ongoing in nature. As such, an eligible program will be either a weekly program lasting a minimum of eight consecutive weeks or, in the case of children’s camps, a program lasting a minimum of five consecutive days.
Family Caregiver Tax Credit
The budget introduces a new tax credit for caregivers of dependants with a mental or physical infirmity, including spouses, common-law partners and minor children. The 15% non-refundable credit will be based on an amount of $2,000 and will apply beginning in 2012.
Caregivers will benefit from this credit by claiming an enhanced amount for an infirm dependant under one of the existing dependency-related credits: Spousal or Common-law Partner Credit, Child Tax Credit, Eligible Dependant Credit, Caregiver Credit and Infirm Dependant Credit.
The budget also proposes to increase for 2012 the threshold for the dependant’s income level at which the Infirm Dependant Credit begins to be phased out, so that the enhanced amount is fully phased out at the same income level as the 2012 enhanced Spousal or Common-law Partner Credit.
The $2,000 Family Caregiver Credit amount will be indexed to inflation for 2013 and subsequent years.
Registered Disability Savings Plan — Shortened life expectancy
The budget proposes to allow Registered Disability Savings Plan (RDSP) beneficiaries who have shortened life expectancies to withdraw more of their RDSP savings by permitting annual withdrawals without triggering the 10-year replacement rule, subject to specified limits and certain conditions.
This measure will apply after 2010 to withdrawals made after Royal Assent to the enacting legislation. However, as a transitional rule, beneficiaries making an election to take advantage of this measure will be permitted to use their 2011 withdrawal limit in 2012, provided that the required medical certification was obtained before 2012.
Tuition Tax Credit — Examination fees
The budget proposes to amend the Tuition Tax Credit to recognize fees paid to an educational institution, professional association, provincial ministry or similar institution to take an examination that is required to obtain professional status recognized by federal or provincial statute, or to be licensed or certified to practice a profession or trade in Canada.
This measure will apply to eligible amounts paid for examinations taken in 2011 and later years.
Volunteer Firefighters Tax Credit
The budget introduces a new tax credit to allow eligible volunteer firefighters to claim a 15% non-refundable tax credit based on an amount of $3,000.
Governments, municipalities and public authorities who pay firefighters amounts for their services as volunteers will be required to report those amounts to the CRA as part of their annual reporting of remuneration paid.
The credit will apply for 2011 and later years.
Medical Expense Tax Credit for Other Dependants
Individuals can generally claim the Medical Expense Tax Credit for eligible expenses paid for themselves, their spouses or common-law partners or children under 18.
Caregivers may also claim the credit for eligible expenses incurred for a dependent relative if the caregiver pays medical or disability-related expenses of the dependent relative.
Currently, a caregiver may only claim the eligible expenses of a dependant relative that exceed the lesser of 3% of the dependant’s net income and an indexed dollar threshold ($2,052 in 2011), to a maximum of $10,000.
The budget removes this $10,000 limit on eligible expenses that can be claimed under the Medical Expenses Tax Credit for a dependent relative. This measure will apply to 2011 and later years.
RESPs — Asset sharing among siblings
Parents and grandparents who want to save for the education of a number of related children or grandchildren (such as siblings) may open family plans under the Registered Education Savings Plans (RESPs) rules. These plans provide additional flexibility for the subscriber by allowing the allocation of plan assets among the related children, subject to certain restrictions.
To provide subscribers of separate individual RESPs with the same flexibility to allocate assets among siblings as exists for subscribers of family plans, the budget proposes the allow transfers between individual RESPs for siblings, without triggering the repayment of Canada Education Savings Grants, provided that the beneficiary of a plan receiving a transfer of assets had not attained 21 years of age when the plan was opened.
These measures will apply to asset transfers that occur after 2010.
Regulatory Regime for Qualified Donees
The budget proposes to extend certain regulatory requirements that apply to registered charities to certain “qualified donees” (i.e., organizations that are eligible to issue official donation receipts).
Qualified donees that will be subject to the regulatory requirements include, among others:
- Registered Canadian amateur athletic associations (RCAAAs)
- Municipalities in Canada
- Municipal and public bodies performing a function of government in Canada
Further, the budget proposes to extend to RCAAAs additional regulatory requirements that apply to registered charities.
These measures will apply on or after the later of January 1, 2012 and Royal Assent of the enacting legislation.
Details of Regulatory Regime that will apply to Qualified Donees:
- A qualified donee will be required to be on a publicly available list maintained by the CRA.
- If a qualified donee issues a donation receipt that is not in accordance with the Income Tax Act and its regulations, then the CRA will be authorized to suspend the receipting privileges of the qualified donee or revoke its qualified donee status.
- The monetary penalties on the improper issuance of receipts that apply to registered charities will be extended to RCAAAs.
- A qualified donee will be required to maintain proper books and records and provide access to those books and records to the CRA when requested. Failure to do so will permit the CRA to suspend the receipting privileges of the qualified donee or revoke its qualified donee status. (Registered charities and RCAAAs are already required to maintain proper books and records.)
- The monetary penalties associated with failing to file an information return that apply to registered charities will be extended to RCAAAs.
Registered Canadian Amateur Athletic Associations
In addition to the measures described above, the budget proposes to extend further regulatory requirements on RCAAAs that currently apply to registered charities.
The budget proposes that RCAAAs be required to have the promotion of amateur athletics in Canada on a nation-wide basis as their exclusive purpose and exclusive function rather than their primary purpose and primary function.
Consistent with the regime that applies to registered charities, certain related activities will be permitted, e.g., selling merchandise related to the sport, and engaging in limited non-partisan political activities.
Sanctions for failure to comply will be a monetary penalty, suspension of qualified donee status or the revocation of registration.
Stakeholders will have until on or before June 30, 2011 to provide feedback on the introduction of an “exclusivity of purpose and function” test for RCAAAs.
The budget also proposes that if an RCAAA provides an undue benefit to any person, the CRA will be authorized to apply monetary penalties, suspend its receipting privileges or revoke its registration in the same manner that currently applies to registered charities.
The budget also proposes that the CRA will be authorized to make available to the public certain information returns and other documents belonging to RCAAAs, in the same way that currently applies to registered charities.
The budget states that the CRA will consult with stakeholders in developing administrative guidance regarding how these proposed measures will apply.
CRA Given More Discretion to Refuse or Revoke Organization’s Registration
Currently, the Income Tax Act does not allow the CRA to consider the criminal history or other past misconduct by individuals who submit applications for registering their organization as a registered charity or as a registered Canadian amateur athletic association.
The budget proposes to give the CRA the discretion to refuse or to revoke the registration of an organization, or to suspend its authority to issue official donation receipts in such situations.
The CRA will consult with stakeholders in developing administrative guidance regarding these proposed measures. These measures will apply on or after the later of January 1, 2012 and Royal Assent to the enacting legislation.
Gifts Returned to a Donor
The budget proposes to permit reassessments to disallow a taxpayer’s claim for a credit or deduction, where property is returned to a donor.
When property for which a taxpayer received an official donation receipt is returned, the qualified donee must issue to the taxpayer a revised receipt. A copy of the revised receipt must be sent by the qualified donee to the CRA when the amount of the receipt has changed by more than $50.
This measure will apply for gifts or property returned on or after March 22, 2011.
Gifts of Non-Qualifying Securities
The budget proposes that the tax recognition of a donation of non-qualifying securities (NQS) , for the purpose of determining a charitable donation tax credit or deduction of a donor, will be deferred until such time, within five years of the donation of the NQS, as the qualified donee has disposed of the NQS for consideration that is not, to any person, another NQS.
For this purpose, an NQS is a share, debt obligation or other security issued by the taxpayer or a person not dealing at arm’s length with the taxpayer.
The budget also proposes certain anti-avoidance rules related to this measure.
These measures will apply to securities disposed of by donees on or after March 22, 2011.
Granting of Options to Qualified Donees — No Charitable Donation Tax Credit/Deduction
The budget “proposes to clarify” that the charitable donations tax credit or deduction is not available to a taxpayer for the granting of an option to a qualified donnee to acquire a property of the taxpayer until the time that the donee acquires the property of the taxpayer that is the subject of the option.
Further, a donation tax credit/deduction will not be available to a taxpayer if the total amount paid by the qualified donee for the property and the option exceeds 80% of the fair market value of the property at the time of acquisition by the donee.
This measure will apply for options granted on or after March 22, 2011.
Fiscal Measures for Business
In addition to the various tax measures included in the budget papers, the government announced a number of other initiatives geared to supporting the Canadian recovery and growth in jobs.
Several initiatives were announced targeted to Clean Energy as well as Canadian Agriculture and Forestry aimed at supporting innovation and competitiveness in these sectors.
2011 — Year of the Entrepreneur
The government declared 2011 The Year of the Entrepreneur in order to help increase public awareness of the important role played by small business.
In addition to previously announced tax reduction measures including the temporary Hiring Credit for Small Business, the budget provides for a number of “red tape reduction” initiatives including the extension of the BizPaL online service, and the establishment of a Red Tape Reduction Commission to attack regulatory overlap and waste.
The government signaled its support for Public-Private Partnerships by requiring all federal departments to evaluate the potential of utilizing P3s for large federal capital projects, defined as those having a capital cost of $100 million or more, and to develop a P3 proposals for those showing promise.
Digital Economy Strategy
The budget commentary identifies the importance of making Canada leader in the creation, adoption and use of digital technologies and content. Numerous targeted initiatives provide several hundred million in funding over a three-year window for the adoption of information technologies by small and medium sized business, to increase student enrolment in key disciplines related to the digital economy, and funding for the Canadian Media Fund for investment in digital content creation.
Policy Framework for Aerospace
Recognizing Canada’s aerospace industry as a technology leader and driver of high-quality jobs, the government announced that it will conduct a comprehensive review of all policies and programs related to the industry to develop a federal policy framework to maximize the competitiveness of this export-oriented sector.
Given Canada’s role as a trading nation, the government has entered negotiations for trade agreements with 50 countries, including the European Union and India. This would add to the current count of eight formal trade agreements.
Additionally, the government announced plans to overhaul the Customs Tariff legislation and a one-year extension of the Export Development Corporation’s ability to finance in the domestic market.
In addition, the government announced the development of a specific India Engagement Strategy in recognition of India’s high growth and potential as a significant trading partner.
Numerous targeted initiatives were announced dealing with ongoing development, repair and maintenance of federal transportation infrastructure, including the final step in Canada’s coast-to-coast-to-coast highway via the completion of the Dempster Highway through to the Arctic coast.
In addition, funding of the annual $2 billion investment through the Gas Tax Fund will be legislated, securing longer-term funding for municipalities planning infrastructure spending.
Indirect Tax Changes
Customs Tariff Measures
Simplification — These measures include the reduction of customs processing burden for businesses, modification of the structure of the Customs Tariff to make it more user-friendly, and technical modernization that will revoke obsolete provisions.
Low Value Imports — The budget proposes three new tariff items in Chapter 98 to facilitate the processing of low value non-commercial imports arriving by post or by courier.
We Can Help
Your KPMG adviser can help you assess the effect of the tax changes in this year’s federal budget on your personal finances or business affairs, and point out ways to take advantage of their benefits or ease their impact. We can also keep you abreast of the progress of these proposals as they make their way into law and help you bring any concerns you may have to the attention of the Ministry of Finance.