Canada Cutting Corporate Tax Rates

By November 1, 2007Taxation

Global competition just got more competitive. From the Globe and Mail,Flaherty targets lowest tax rate in G7“:

OTTAWA — The federal government is accelerating and deepening its corporate tax cuts, in an attempt to make Canada the most competitive tax regime in the Group of Seven rich countries.

In a surprise move, Finance Minister Jim Flaherty is proposing an immediate reduction of the corporate tax rate, to be followed by further cuts in coming years, to bring the federal corporate tax rate down to 15 per cent by 2012.

The existing rate for 2007 is 22.12 per cent. That will drop to 19.5 per cent in 2008 under the new plan. Mr. Flaherty had originally planned to reduce it more gradually, to 18.5 per cent by 2012.

The Liberals are coming back at Flaherty and the Conservatives by suggesting even deeper reductions.

Meanwhile, Tom Aquino of the Council of CEOs likes what he’s seeing.

By giving Canada the lowest corporate tax rate among major industrial countries and an advantage of more than 12 percentage points over the United States, this tax-cut plan will help companies to continue to invest and grow in Canadian communities despite the rapid rise of the Canadian dollar and intense global competition.

Chairman Charles Rangel of the Ways and Means Committee has unveiled a grand maternal tax proposal that would lower top U.S. corporate tax rates from 35 to 30.5 percent.

Seems like a start, a modest one…

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