NLIS 1
October 24, 2001
(Finance)

 

Minister confirms personal income tax reduction deferred

Finance Minister and Treasury Board President Joan Marie Aylward today confirmed the third year of the province�s three-year personal income tax reduction program will be deferred as a result of slowing economic conditions.

"The economic slowdown that was in evidence in Canada and the United States over the past number of months has been accelerated by recent events and Newfoundland and Labrador is not immune," said Minister Aylward. "It is incumbent on government to manage the province�s finances in a responsible and prudent manner. I believe deferring the third-year of the personal income tax strategy is the best course of action given the current fiscal uncertainty.

"When the personal income tax reduction strategy was announced, government clearly said moving ahead with the second and third year of the strategy would be contingent on continued strong economic growth. In recent weeks, government has indicated the deficit this year will be higher than projected and we have already implemented measures to address this situation. Deferring the third year of income tax reductions is another measure government must take as we continue to practice sound financial management."

Minister Aylward said: "Even though the third year of our program is being deferred, taxpayers continue to realize savings as a result of previous provincial and federal tax reduction measures.

The benefits of the first two years of the provincial income tax reduction measures, when combined with federal income tax reductions, will result in $124 million in savings for taxpayers this year as compared to 1999. Cumulative savings from provincial and federal tax reductions since 2000 are higher than originally budgeted and will return $321 million to the provincial economy in 2002, $198 million through provincial measures and $123 million through federal measures."

Minister Aylward said government would reassess the third year of the province�s tax reduction measure as economic conditions improve.

"Newfoundland and Labrador�s economic outlook is positive. While we are addressing the consequences of a global economic slowdown today, I have full confidence that the province�s economic performance can only get stronger as we move forward," said the minister.

Media contact: Lynn Barter, Communications, (709) 729-0329.

2001 10 24                            9:00 a.m.


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