Small businesses across Canada are still being taxed on their carbon tax rebates, despite a commitment from the former finance minister that they would be tax-free, says the Canadian Federation of Independent Business (CFIB).
The CFIB says it has been informed by the Canada Revenue Agency that the rebate is considered “assistance received by the taxpayer from a government in the taxation year in which the assistance is received” and that it’s subject to income tax.
The federation says the CRA also told it that former Minister of Finance Chrystia Freeland’s announcement last year that the rebate will be tax free and the financial economic statement “were not accompanied by proposed legislative amendments.”
The prorogation of Parliament is not making the situation any easier, says CFIB president and CEO Dan Kelly, as only new legislation presented in Parliament can override this decision.
The CFIB, Canada’s largest association of small and medium-sized businesses, is calling for Parliament to be reconvened to pass legislation to make the rebate tax free, for the government to freeze a 19 percent increase in the carbon tax planned for April 1 and return the small business rebate formula to nine percent of total revenue as long as the carbon tax is in place.
The Canadian Press has requested comment from the CRA and the office of Minister of Finance and Intergovernmental Affairs Dominic LeBlanc.
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