Income taxes throughout Canada
taxes are highly progressive with the high income residents paying a
significantly higher percentage than the low income residents.
Canadian income taxes are still less progressive than those of many
nations.
Where income is earned in the form of a capital gain, only half of the
gain is included in income for tax purposes; the other half is not
taxed.
Canadian Personal income tax can be deferred in a Registered
Retirement Savings Plan, a tax sheltered savings account or mutual fund
that is intended to help individuals save for their retirement.
Canadian Corporate taxes
Companies and corporations pay tax
on profit income and on capital. These make up a relatively small
portion of total tax revenue. Tax is paid on corporate income at
the corporate level before it is distributed to individual shareholders
as dividends. A tax credit is provided to individuals who receive
dividend to reflect the tax paid at the corporate level.
This tax credit does not eliminate double taxation of this
income completely, however, resulting in a higher level of tax on
dividend income than other types of income. (Where income is earned in
the form of a capital gain, only half of the gain is included in come
for tax purposes; the other half is not taxed.)
Canadian Sales taxes -
GST - PST
The federal government levies a
multi-stage sales tax of 6% on goods and services (7% prior to 1 July
2006), that is called the Goods and Services Tax (GST), and, in
some provinces, the Harmonized Sales Tax (HST). The GST/HST is similar
to a value-added tax. The Conservative Party of Canada's 2006 election
platform proposed to reduce the GST to 5% and the HST to 13%.
All provincial governments except Alberta levy sales taxes as
well. The territories of Nunavut, Yukon and Northwest Territories do not
charge provincial sales tax. |
