2001 payroll tax changes

Finance Minister Joan Marie Aylward announced today in her 2001 Budget Speech that effective April 1, 2001, the exemption threshold of the Health and Post-Secondary Education Tax (HAPSET), commonly know as the payroll tax, will increase on an annual basis to $500,000. Since 1998-1999, businesses in Newfoundland and Labrador have saved $8.6 million.

Since 1997, government has increased the exemption threshold from $100,000 to $500,000. In other words, all businesses with an annual payroll of $500,000 or less will not pay any payroll tax at all, and any business with a payroll of more than $500,000 will pay less tax than previously.

"Our commitment is to move toward total phase-out of the Health and Post-Secondary Education Tax as we can afford to do so," said Minister Aylward. "This threshold increase will remove a further 200 businesses from the tax roll, bringing the total number of businesses which have benefitted to date to 2,025. It is consistent with the messages we have heard both at our pre-budget consultations and through the Jobs and Growth consultations."

Media contact: Paula Dyke, Communications, (709) 729-0329.

2001 03 22                                3:50 p.m.