Sunday, July 21, 2024

Provincial Indexation, Tax Credits Help with Affordability

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The Saskatchewan Affordability Tax Credit (SATC) payment and indexation are among the government initiatives helping make life more affordable for Saskatchewan people.

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Indexation of the provincial Personal Income Tax (PIT) system preserves the real value of personal tax credits, the income tax brackets, as well as benefits such as the Saskatchewan Low-Income Tax Credit.

Indexation will result in Saskatchewan residents seeing $94.5 million in annual income tax savings. The level of indexation in 2023 will be 6.3 per cent, which matches the annual average national inflation rate from October 2021 to September 2022. The combined effect of the indexation of the tax system from 2007 through the 2023 taxation year is saving Saskatchewan taxpayers a total of approximately $284.5 million on their 2023 taxes.

In 2023 through indexation, on average, an individual with an income of $25,000 will see $125 in savings, a family of four with a combined annual income of $75,000 will save $371 and a family of four with a combined annual income of $100,000 will save $362.

Saskatchewan has among the lowest personal taxes in the country. Since 2007 PIT exemptions have removed more than 112,000 people from the province’s income tax roll. In total, PIT reductions since 2007 are providing over $720 million in annual income tax savings to Saskatchewan people.

In addition, a family of four pays no provincial income tax on their first $56,550 of combined income which is among the highest thresholds in Canada and more than twice as much as in 2007, when a family of four began paying income tax once their combined income reached just $26,150.

In late August, the Government of Saskatchewan introduced the Four Point Affordability Plan and in addition to the one-time $500 SATC payments, the small business tax rate reduction was extended by a year to further support small businesses as they continue to recover from the pandemic and face inflationary pressures.

The plan also included keeping gym and fitness memberships and recreational activities for youth PST exempt. The province’s strong finances allow government to reduce borrowing and retire up to $1 billion in debt, resulting in lower annual interest costs and allowing those savings to be invested into priorities such as health care, education and social safety nets.

“Saskatchewan is forecast to lead all provinces in economic growth this year and next, and strong revenue from our resources has allowed us to help individuals and businesses with higher costs due to inflation, while paying down debt. That’s growth that works for everyone,” Deputy Premier and Finance Minister Donna Harpauer said.

Also helping with affordability, families in Saskatchewan with children enrolled in sports, arts and cultural activities will continue to be able to claim the Active Families Benefit on their 2022 taxes.

The benefit was reinstated in 2021 and provides a refundable tax credit of $150 per year, per child, to eligible families. Families of children with a disability will receive an additional $50, for a total tax credit of $200 per year, per child. Parents who enroll their children in sports, arts and cultural activities are reminded to keep their receipts so they may claim the benefit with their annual tax filings.

“Our government recognizes that costs have risen due to inflation, and we are committed to taking steps to help keep life affordable for Saskatchewan people,” Harpauer said.

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