The following is a summary of the tax changes announced by Finance Minister Siobhan Coady on May 31, 2021 during her delivery of the province’s 2021 budget.
There are no changes proposed to the corporate income tax rates.
The budget introduced three new tax brackets for income levels above $250,000 as well as increase in the personal tax rate on income above $135,973 effective January 1, 2022.
The new rates and brackets are as follows:
The amount of additional tax paid on the income in each tax bracket is calculated as follows:
As a result of these proposals, the combined federal and provincial top marginal tax rates commencing January 1, 2022 will be as follows:
The budget also introduced a new refundable Physical Activity Tax Credit of up to $2,000 per family. The maximum value of this credit is $174 per family.
Indirect Tax Changes
There were no changes proposed to the HST however in her budget speech, Minister Coady indicated that the province will evaluate increases to the HST.
The budget proposes a new 20 cent per litre sweetened beverage tax effective April 1, 2022.
Tax on cigarettes will increase by three cents per cigarette and by six cents per gram of fine cut tobacco.
Photo: The Confederation Building in St. John’s, N.L. (Wikimedia Commons photo/David P Janes)