Charlottetown, Prince Edward Island – New changes to the Basic Personal Amount and Business Tax Credit will provide more tax relief to Islanders and Island businesses.
In Budget 2018 the Basic amount was raised by an additional $500 bringing the total to $8,660. Now, government is again raising the amount by $500 bringing the new total to $9,160. This change will be made retroactively to January 1, 2018.
“Our economy is stronger than ever and we are continuously looking at ways Islanders can benefit from this success. Our province’s solid financial position – with a surplus of $75.2 million – means we can now further accelerate the priorities of Islanders so they all share in the benefits,” said Finance Minister Heath MacDonald. “Since coming to office in May 2015 our government has worked to reduce income taxes and this will save Islanders nearly $50 million by the end of next year.”
This will benefit approximately 84,000 Islanders, saving them an extra $4.1 million a year. Combined with the previously-announced increase for this year, that represents a total savings of $8.2 million. As a result of these changes, 5,200 Islanders no longer pay any provincial income tax.
This represents the fifth increase to the basic personal exemption since 2015, after seven years of no changes.
Building on the commitment in Budget 2018 to reduce tax on small business and the new capital investment grant, an additional reduction of 0.5 per cent will be added. This will come into effect January 1, 2019.
“A further reduction in the small business tax will help our vibrant Island businesses continue to thrive and grow,” said Minister MacDonald. “These businesses are the backbone of our provincial economy, they are putting Prince Edward Island and our renowned products on the world map.”
This represents a further $1.2 million in savings for approximately 2,600 small businesses, for a total savings of $2.4 million. This means a savings of up to $5,000 for an individual business.