Thursday August 21, 2014

More savings from tax indexation


Saskatchewan people will save an estimated $6.5 million in 2014 with the continued indexation of the provincial income tax system.

“Indexing all income tax brackets and tax credit amounts each year to the rate of inflation protects Saskatchewan taxpayers from ‘bracket creep,’” Finance Minister Ken Krawetz said. “In 2014, all of these amounts are being increased by 0.9 per cent.

“One of the priorities of our government’s Plan for Growth is to keep taxes competitive.  Continuing to index the income tax system helps us accomplish that and again demonstrates our government’s commitment to keeping the taxes of Saskatchewan people as low as possible. By the end of 2014, a family of four with $50,000 income will have saved about $15,000 through our government’s various tax reductions.”

A family of four with $50,000 annual income has now seen their provincial income tax cut by more than 90 per cent since 2007 - from about $2,300 in income tax to less than $200 in income tax in 2014 - a savings of more than $2,100 a year.

Individual taxpayers now pay no Saskatchewan income tax on their first $18,650 of income while a family of four pays no Saskatchewan income tax on their first $48,320 of income - the highest tax-free income threshold for a family of four in Canada.

Since 2008, about 114,000 low-income Saskatchewan residents have been removed from the tax rolls. Overall, Saskatchewan residents have saved more than $300 million through lower personal income taxes.

Over the past six years, measures to reduce personal income taxes in Saskatchewan include:

Increasing personal, spousal and child exemption amounts and introducing a new Low Income Tax Credit in 2008;

Introducing a new Active Families Benefit of $150 per child for cultural and sports activities in 2009;

Raising personal, spousal and child exemption amounts again in 2011; and

Expanding the Active Families Benefit to include all children 17 and under (previously, it only covered ages six to 14) and introducing a new First-Time Homebuyers’ Tax Credit in 2012.

When income tax savings are combined with new tax reduction programs introduced since 2007, that include the refundable Low Income Tax Credit and the Active Families Benefit, a single person with $25,000 annual income will benefit from $856 in lower provincial tax in 2014 than in 2007. A family of four with $50,000 combined income will see tax savings of $2,775 and a family of four with $75,000 combined income will see tax savings of $2,542, when comparing 2014 to 2007.



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