Are tax rates high in Canada?
To improve economic productivity and to ensure economic growth and prosperity, the tax rates of a nation must not be too high. Common service-holders and investors can’t invest enough if they have to pay bigger amounts from their income as taxes.
Unfortunately,a lot of studies have found that since the last 4 to 5 years, Canada has been experiencing high personal tax rates and below-par tax competitiveness. Each and every Canadian tax consulting service is compelled to approach various public finance departments so that they can avail a lot of discounts and benefits for their clients.
A few statistical facts
At first, you should look at the report of The Fraser Institute released on March 14, 2019. It has clearly stated various facts about the tax rates of Canada in 2017. Among all OECD nations, in 2017, Canada had the seventh-highest tax rate and it was approximately 53.53%. Even the average tax rates of Australia and the UK were lower than that of Canada and those rates were 49% and 45%, respectively.
In 2017, approximate tax rates in Ontario and Quebec were 53.53% and 53.31%, respectively. But, in 2009, the combined tax rates of both of these cities were less than 50%.
Since 2017, people from the income level of $205,842 have been paying taxes following the top personal income tax rate. But, in some other nations including the USA, top marginal tax rates are applicable at an income level of $500,000.
Some other facts due to which Canadian tax policy is not reasonable
Each and every tax consultant in Toronto comes across clients who belong to the lower-income groups. That means, people from all income groups in Canada need to pay excessive tax amounts at unreasonable rates. Almost all Canadian provinces have imposed such non-competitive tax regulations.
When speaking about corporate tax rates, the federal tax rate is 15% for running businesses, whereas, in some provinces, the combined tax rates touch 27%. The USA and a few other nations have experienced various tax reforms and thus, their corporate tax rates are very much competitive than those of Canada.
Many financial experts have expressed concerns mentioning the high top marginal rates of Canada. Due to these high rates, many individuals do not show eagerness to perform productive economic activities.
At The Accounting & Tax, we offer a wide range of accounting solutions. Like a trusted Canadian tax consulting service, we offer the services of Senior Accountants who can help you follow different procedures legally, so that you don’t need to pay any excess tax amount.
