Heading into the 2018 federal budget, tax fairness and clarity are top issues for small business owners across the country according to the Coalition for Small Business Tax Fairness.
In a letter to Finance Minister Bill Morneau from the coalition, made up of 75 organizations representing hundreds of thousands of business owners across the country, the group said that the changes being made to tax rules that allow passive investments may harm small businesses in their ability to save money for larger investments.
“While the small business community recognizes that government made some improvements to its tax proposals last fall, the confusion and worry remain very high,” said Dan Kelly, president of the Canadian Federation of Independent Business. “Virtually no business owner understands the new income sprinkling rules that are now in place and, at the same time, the business community is bracing for passive investment changes expected in the upcoming budget.”
In the letter to Morneau, the coalition recommended the following to the federal government:
Immediately undertake an economic impact assessment of the package of proposed changes and delay implementing any changes until the assessment is complete
Postpone the application of income-splitting changes until at least January 1, 2019, and exempt spousal income and dividends from the new rules
Drop the proposed tax hike on income from passive investments
Undertake a comprehensive review of Canada’s income tax system
“The government has shown an openness to listen to small business owners. However, much more needs to be done to restore business owners’ confidence and make Canada more competitive,” said Hon. Perrin Beatty, president and chief executive officer of the Canadian Chamber of Commerce. “If we really want small businesses – which are at the very core of our economy – to grow and prosper, we need a comprehensive review of our tax system. The upcoming federal budget presents a perfect opportunity for government to make that commitment to business owners.”
The president of the Institute of Advanced Financial Planners, Jeff Wachman, talks about supporting the coalition’s recommendations and urging the federal government to reconsider their changes as it is unfair to all business owners who have been creating many jobs in the country.
“In the 30 years since the registered financial planners’ inception, we have never before seen a government attack the ability of hundreds of thousands of Canadians to plan for their retirement,” said Wachman.