The Honourable Tom Osborne, Minister of Finance and President of Treasury Board, today accepted a report on the province’s tax system from the Independent Tax Review Committee (ITRC). The review considered the tax capacity of the province, taking into account issues such as competitiveness and economic impacts.

Minister Osborne and Steve Jarrett, chair of the committee, will be available to media to discuss the report today at 2:00 p.m. in front of the House of Assembly, East Block, Confederation Building.

Overall, the committee found that Newfoundland and Labrador has a progressive and fair taxation system. In considering total taxation in the province, including both provincial taxes and local/municipal taxes and fees, the ITRC determined that the total tax burden in the province is generally in line with other jurisdictions.

In their report, the committee put forward the opinion that the province is not in a position to reduce taxes significantly. The committee also considered whether the appropriate tax mix is applied to taxpayers. The report includes several recommendations in line with these findings, such as:

• Should government find itself in a position to reduce taxes in the future, any initial reductions should be focused on Personal Income Tax, which would include the Temporary Deficit Reduction Levy.
• If practical, government should consider ending the Temporary Deficit Reduction Levy before the end of 2019.
• The province should continue efforts to broaden consumption tax bases.
• Government needs to study the impact of local taxes and fees to determine the total tax burden in our province.
• Over the next 4-7 years, the Government of Newfoundland and Labrador must bring expenditures in line with available consistent revenue sources.
• The province must encourage greater regional cooperation.
• Newfoundland and Labrador should consider tax credit programs for the green economy as fiscal resources allow.
• Over the next 4-7 years, the payroll tax (HAPSET) exemption threshold should be increased from $1.2 million to $2.5 million.

Taxation is one of the key ways that government manages the province’s fiscal and economic affairs. The ITRC’s comprehensive review of the current tax system was a commitment of The Way Forward to strengthen the province’s economic foundation. The Way Forward outlines all actions the Provincial Government is taking to achieve a strong, diversified province with a high standard of living, and can be viewed at thewayforward.gov.nl.ca.

Quotes
“I would like to thank the Independent Tax Review Committee for their considerable work over the past year in reviewing taxation in our province. This report will help inform our government’s approach to the upcoming budget. Our government is committed to ensuring the province’s tax system is competitive and fair, and as we are able to reduce taxes we are committed to doing so.”
Honourable Tom Osborne
Minister of Finance and President of Treasury Board

“Our report contains recommendations that are reasonable and which, if followed, can help improve tax competitiveness in our province. Specifically, the personal income tax, which includes the Temporary Deficit Reduction Levy should be a focus for government. Early elimination of the levy would be strongly encouraged and would make the province’s taxation system more competitive with other jurisdictions.”
Steve Jerrett
Chair, Independent Tax Review Committee

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Learn more

Summary Report – Independent Tax Review Committee

Review of Provincial Tax System and Plan to Eliminate Book Tax Announced

Independent Tax Review Committee

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Media contacts
Marc Budgell
Finance
709-729-2477, 689-0430
marcbudgell@gov.nl.ca

Steve Jerrett
Independent Tax Review Committee
709-631-6797