The Honourable Tom Marshall, Minister of Finance and President of Treasury Board, reminds taxpayers that the $75 million, one percentage point decrease in each Personal Income Tax rate announced in Budget 2008 comes into effect July 1, 2008. Minister Marshall said this reduction is a part of a package of tax and fee reduction initiatives that will put $342 million back into the hands of the people of this province over a two-year period.

Over the past two years, the Williams Government has implemented personal income tax reductions worth $230 million. Minister Marshall said that level of commitment is having a meaningful impact on all Newfoundlanders and Labradorians.

"Effective July 1, 2008, Newfoundland and Labrador will now have among the lowest tax rates in Canada, significantly improving our competitiveness nationally," said Minister Marshall.  "Moving from the highest personal income tax burden to where we are today in two short years is a tremendous accomplishment that is to be celebrated, as it positions our province once again as a preferred place in which to work and live."

The minister said this year�s reduction in personal income tax rates is a part of larger package of Budget 2008 tax and fee reductions that is making more money available for the taxpayers of this province. 

"This year we will enhance the seniors benefit resulting in 31,500 seniors receiving more money.  The tax free exemption threshold for the payroll tax will be increased to $1 million to benefit almost 900 businesses.  Motor vehicle registration fees have been reduced from $180 to $140 and ferry rates have decreased.  We have also eliminated the 15 per cent retail sales tax on insurance, saving Newfoundlanders and Labradorians an additional $94 million this year and $75 million annually thereafter," said Minister Marshall.

"The tax and fee reductions contained in Budget 2007 and Budget 2008 will result in a combined annualized amount of $342 million going back into the pockets of Newfoundlanders and Labradorians," said Minister Marshall. "It is a considerable amount of money that is benefiting workers, seniors, homeowners, automobile owners, businesses, volunteers and consumers, all of whom have been impacted by the highest personal income tax burden in Canada for many years."

Minister Marshall said the tax and fee reduction measures will improve the province�s overall competitiveness throughout the country as the province works to recruit and retain a highly skilled and professional workforce.

"When measures are fully annualized in 2009, a single taxpayer earning $30,000 per year will save $640 in provincial Personal Income Tax, or a savings of 29 per cent; a two- income family earning $40,000 each will save $2,000 or realize a 26 per cent overall savings; and a single parent making $21,000 will no longer be required to pay provincial Personal Income Tax resulting in a 100 per cent savings," said Minister Marshall.

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Media contact:
Bill Hickey
Director of Communications
Department of Finance
709-729-6830, 691-6390
billyhickey@gov.nl.ca