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Qubec's Tax System Indexed for 2008 - $215 Million in Taxpayers' Pockets
(Canada Newswire English Via Thomson Dialog NewsEdge) Attention News Editors
QUEBEC CITY, Dec. 12 /CNW Telbec/ - The Minister of Finance, Minister for Government Services, Minister responsible for Government Administration and Chair of the Conseil du trsor, Monique Jrme-Forget, today announced that the personal income tax system will be indexed by 1.21% effective January 1, 2008. The indexing will apply to the tax table and to most tax credits.
Indexing the tax system protects taxpayers' purchasing power against rising prices of goods and services. In practical terms, indexing the tax system increases the amount of many deductions and tax credits by a rate equivalent to the rise in consumer prices in Qubec in 2007. "The result will be a decline of $215 million in personal income tax of Qubec taxpayers in 2008," the Minister explained. All in all, since 2004, the indexation of Qubec's tax system has meant tax savings of close to $1.4 billion.
Ms. Jrme-Forget noted that between 1994 and 2002, Qubec's personal income tax system was not indexed. Consequently, the purchasing power of taxpayers fell each year during that period.
Tax burden reduced
The indexation of the tax burden is in addition to the tax reduction measures announced in the last four budget speeches. The 2007-2008 Budget alone included a general personal income tax reduction of $950 million. Since 2003, individuals have benefited from personal tax relief of $4.5 billion.
Since 2003, Qubec's tax situation has improved spectacularly compared to the other provinces. The tax burden differential that existed with the other provinces with respect to personal income tax has been substantially reduced. The differential was $2.1 billion in 2003, whereas it will be $646 million in 2008, a decline of 70%. "That means that Qubec has moved from ninth to fifth place among provinces with the lowest tax burden in Canada," Ms. Jrme-Forget concluded.
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APPENDIX
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MAIN PARAMETERS OF THE TAX SYSTEM SUBJECT TO INDEXATION
(Dollars)
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2007 2008
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Indexation rate, % 2,026516452566 1,21
Tax table
Maximum threshold of first taxable income
bracket(1) 29 290 37 500
Maximum threshold of second taxable income
bracket(1),(2) 58 595 75 000
Amount used to calculate the basic tax credit(1) 9 745 10 215
Amount of recognized essential needs
Amount for a person living alone
- basic amount 1 180 1 195
- single-parent family supplement 1 465 1 485
Amount of the transfer of the recognized
parental contribution
- maximum amount of recognized needs 6 650 6 730
- reduction when only one study term is
completed 1 860 1 885
Amount for other dependants 2 705 2 740
Amount for severe and prolonged mental or
physical impairment 2 295 2 325
Reduction threshold for certain tax credits(3) 29 290 29 645
Parameters of certain refundable tax credits
Refundable tax credit for child support
- maximum basic amount for the 1st child 2 091 2 116
- maximum basic amount for the 2nd and
3rd children 1 045 1 058
- maximum basic amount for the 4th and
subsequent children 1 567 1 586
- maximum amount for a single-parent family 732 741
- minimum basic amount for the 1st child 587 594
- minimum basic amount for the 2nd and
subsequent children 541 548
- minimum amount for a single-parent family 293 297
- monthly amount for a handicapped child 165 167
QST credit
- basic amount 172 174
- amount for spouse 172 174
- amount for a person living alone 117 118
Property tax refund
- maximum allowable taxes 1 450 1 470
- taxes deducted per adult 480 485
Tax credit for medical expenses
- maximum amount 1 020 1 032
- reduction threshold 19 715 19 955
- minimum amount of labour income 2 610 2 640
Tax credit for residents of a northern village
- basic monthly amount 61 62
- monthly amount for spouse 61 62
- monthly amount for a dependant 26 26
Tax credit for an informal caregiver of an
adult person
- basic amount 561 568
- supplement reducing with income 459 465
- reduction threshold 20 405 20 650
Basic amount and amount for spouse for the
purposes of tax withholdings at source 9 750 10 215
1% contribution by individuals to the HSF
Maximum threshold of first taxable income
bracket 12 620 12 775
Maximum threshold of second taxable income
bracket 43 880 44 410
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(1). The amount for 2008 was set in the 2007-2008 Budget.
(2). The last taxable income bracket includes all taxable income over the
maximum threshold applicable to the second taxable income bracket.
(3). Tax credit for a person living alone, for age and for retirement
income, refundable tax credit for the QST, property tax refunds and
refundable tax credit for individuals living in a northern village.
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Catherine Poulin, Acting Press Relations Officer, Office of the Minister of Finance, Minister for Government Services, Minister responsible for Government Administration and Chair of the Conseil du trsor, (418) 643-5270, (514) 873-5363
Copyright 2007 Canada Newswire Ltd. All Rights Reserved.
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