Ottawa’s latest tax cuts and credits are set to start showing up in Yukoners’ pockets.
Once a bill to change the Yukon’s income tax laws passes the legislature, the territory’s citizens can expect to save a bit more on their taxes, said Finance department director Bill Curtis.
“All we’re doing is mimicking the initiatives the feds took,” said Curtis of changes likely to become law before the end of the fall sitting.
If passed, the basic personal deduction on Yukon income tax sheets for fiscal year 2006 will increase to $8,839 from $8,328.
That raises the personal tax credit to $622 from $586, said Curtis.
“It basically translates into $36 in your pocket,” he said.
Changes to eligible dependant deductions and pension income could mean an additional $100 in Yukoners’ pockets, he added.
Several tax-credit programs that mirror schemes created by Prime Minister Stephen Harper’s Conservative government are included in the new legislation, including credits for adoption expenses, public transit passes and a “Canada employment amount.”
Changes to the Yukon low-income family tax credit and credits for dividends will also be changed when the bill passes, to fall in line with Ottawa’s latest tax changes.
Tax credits are different than tax deductions, as they are amounts in addition to deductions that are returned to taxpayers who qualify for them, explained Curtis.
Together, the cuts and credits will take an estimated $4.3-million from the Yukon government’s tax revenues over the next two years, he said.
“If you take that and divide it by the number of taxpayers in the Yukon, you can see immediately that doesn’t add up to a whole lot of money here,” he said.
“It works out to be, on average, $95 per person.”
But Finance Minister Dennis Fentie calls the cuts a boon for Yukon taxpayers.
“These tax amendments will put approximately $4.3-million back in the pockets of Yukoners,” said Fentie in a release.
The release includes an example of a hypothetical couple making $45,000 per year each, with one adopted child.
Under the old regime the couple would owe the Yukon $5,618 in taxes; under the new rule, that amount drops $791, to $4,827.
“I want all Yukoners to know that they will find relief from income tax, effective for 2006, with these amendments,” said Fentie in the release.