TORONTO — Ontario has fulfilled its promise to cut the small business Corporate Income Tax (CIT) rate by 8.7 per cent by reducing the rate to 3.2 per cent effective January 1, 2020. Supporting small businesses is part of the government’s plan to attract investment and enable entrepreneurs and risk takers to grow their businesses and create high-paying, good quality jobs.
“Ontario has tremendous opportunity and potential, and we are working to create the conditions for job creators to grow and succeed. An important part of our plan is to reduce the tax rate for small businesses, as they play a vital role in the economy,” said Rod Phillips, Minister of Finance.
This tax cut will deliver up to $1,500 in annual savings to more than 275,000 businesses – from family-owned shops to innovative start-ups. Overall, Ontario’s small businesses are saving $2.3 billion in 2020 through government actions such as cancelling the cap-and-trade carbon tax, supporting Workplace Safety & Insurance Board premium reductions, providing Ontario income tax relief and other measures. To date, the government has also taken over 100 actions to cut red tape for businesses. These and other expected measures would save businesses $400 million in compliance costs.
“A lower small business tax rate is a welcome way to kick off the new decade,” said Julie Kwiecinski, Director of Provincial Affairs for Ontario at the Canadian Federation of Independent Business. “The move will help make doing business in Ontario more affordable, providing extra money for job creators to use where it’s most needed.” To continue to build on these steps, the government is consulting with industry and business leaders to inform its Small Business Success Strategy.
- Small businesses already benefit from accelerated write-offs of capital investments as well as the government’s decision to not parallel a federal measure that would have increased taxes on some small businesses earning passive investment income.
- These tax measures, along with the small business CIT rate cut, would deliver a total of $255 million in Ontario income tax relief to small businesses in 2020.
- Today, there are more than 470,000 small businesses in Ontario representing almost 98 per cent of all businesses in the province. Small businesses provide about one-third of private-sector employment — just over two million jobs — and play a large role in the economy by providing goods and services to larger companies, consumers and government.
SOURCE : NEWSROOM ONTARIO