Additional tax reductions effective July 1, 2000

Taxpayers in Newfoundland and Labrador should begin to see an increase in their take home pay as a result of income tax reductions which came into effect on July 1, 2000. In fact, in 2000, taxpayers in this province will see the largest tax savings in the country.

"Provincial tax reductions effective from July 1 will put an additional $12 million of provincial money back into the hands of taxpayers this year," said Finance Minister Lloyd Matthews. "This is over and above the provincial tax reductions implemented on January 1, 2000 which saved taxpayers $30 million annually." Minister Matthews said that the government of this province decided to allow the additional provincial tax reductions induced by the federal budget to flow into the hands of taxpayers this year.

The provincial tax reductions are coincident with federal income tax reductions of $18 million over the balance of this year. Minister Matthews pointed out that the July 1 combined federal- provincial savings of $30 million is compressed into a six month period, thereby doubling the impact on pay cheques of a similar reduction effective for the full year. The total combined tax savings for the 2000 tax year will be $60 million with the province providing $42 million of that amount.

For a single earner with taxable income of $40,000, the combined tax reduction in 2000 is $472 of which $317 is provincial tax. A similar taxpayer earning $60,000 in taxable income will see total annual savings of $1,016, of which $637 is provincial tax.

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

2000 07 06                 9:10 a.m.