The Williams Government is once again putting money back into the pockets of Newfoundlanders and Labradorians in Budget 2008, building on last year�s historic tax cuts and fee reductions. The Honourable Tom Marshall, Minister of Finance and President of Treasury Board, today announced the Williams Government will make further reductions to personal income tax rates; enhance the seniors� benefit for single seniors; remove more businesses from the payroll tax rolls; reduce motor vehicle registration fees and ferry rates; and eliminate the 15 per cent tax on insurance.

"The measures announced in today�s budget, when fully annualized, will put another $179 million directly into the hands of Newfoundlanders and Labradorians, bringing the two-year total to $342 million annually," said Minister Marshall. "These tax and fee reductions reward workers, seniors, home owners, automobile owners, businesses, volunteers and consumers who have shouldered the highest personal income tax burden in Canada for many years. They make our economy more competitive, and improve the economic fundamentals that will lead to the creation of more and better paying jobs and will continue the momentum of our growing economy."

Effective July 1, 2008, at a cost of $75 million annually, personal income tax rates will be reduced by one per cent in each tax bracket:

The Williams Government committed in the 2007 Blueprint to maintain the lowest personal income tax rates in Atlantic Canada to the extent that it is fiscally possible. Minister Marshall said this reduction ensures that Newfoundland and Labrador will continue to have the lowest tax rates in the Atlantic Provinces, and improves its competitive position with all provinces.

In Budget 2007, the Williams Government enhanced the Seniors� Benefit for married seniors, benefiting 5,900 senior couples. In Budget 2008, the Provincial Government is enhancing the Seniors� Benefit for single seniors. The change is designed to reflect the fact that the cost of living for a single senior is not substantially different from the cost of living for a married senior couple. Effective for 2008, single seniors will be entitled to the same level of benefit as married seniors. A single senior will receive a maximum benefit of $776, double the maximum amount available in 2007. The full benefit is available to single seniors with net incomes up to $25,275 while a single senior with net income between $25,275 and $31,930 can receive a partial benefit. A total of 31,500 seniors will benefit from these changes.

Effective from January 1, 2008, the tax free exemption threshold for the payroll tax has been increased to $1 million. As a result, 308 employers will no longer have to pay the payroll tax. As well, another 578 employers will see their payroll tax reduced by up to $10,000. Increasing the exemption threshold to $1 million will cost an estimated $6.5 million.

Effective May 1, 2008, motor vehicle registration fees will be reduced from $180 to $140 for passenger vehicles, light trucks, vans and light commercial vehicles. The 10 per cent discount for online registration of vehicles will be maintained. This will result in a $10 million annual saving for vehicle owners.

In Budget 2008, the Provincial Government is investing $1.6 million to apply a road equivalency standard to ferry rates for commercial vehicles, freight and other cargo, reducing commercial rates by as much as 60-70 per cent. This follows up on last year�s initiative which brought passenger and vehicle-plus-driver fares in line with road equivalency.

Retroactive to January 1, 2008, the Williams Government has eliminated the 15 per cent retail sales tax on insurance premiums. This measure will benefit individuals, businesses, municipalities and the not-for-profit sector putting back into their hands savings of $94 million this year and $75 million annually thereafter.

"An equitable and sustainable tax regime is a key element of a strong economy," said Minister Marshall. "The tax and fee reductions outlined in Budget 2008 demonstrate our confidence in the future of this province, and as the Newfoundland and Labrador economy continues to prosper and grow, the people of this province will continue to benefit in meaningful ways."

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Backgrounder

1. Budget 2008 Tax and Fee Measures

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