Tax Revenues Rise In Canada

by Mike Godfrey, Tax-News.com, Washington

02 August 2011

Canada's federal deficit fell in April and May this year, assisted in part by higher tax receipts.

The latest Fiscal Monitor shows that from April-May, 2011, there was a budgetary deficit of CAD3.3bn (USD3.45bn), down from CAD4.4bn for the same period last year. This reduction was aided by a CAD1.1bn (2.9%) increase in revenues, to CAD38.3bn.

Revenues from personal income tax rose by CAD1.4bn (7.8%) to CAD19.8bn, with April's figure comprising of CAD11.2bn and May's intake making up CAD8.6bn of the total.

On the corporate tax front, revenues rose by CAD0.4bn (10%), to CAD4.2bn. This, the Department for Finance says, reflects an an increase in receipts of roughly 6% and a decline in refunds of about 1%. Non-resident income tax revenues were up CAD0.1bn (7%).

On the other hand, excise taxes and duties were down CAD0.8bn (11.8%), which the Department says was driven almost entirely by lower general sales tax (GST) revenues, which fell 17.6%. This is blamed on the result of timing differences between large values of GST owed to the government and credits claimed for GST paid on inputs, which the Department says can cause high volatility in net collections on a monthly basis.

Nonetheless, energy taxes were up CAD30m, customs import duties rose by CAD15m, and other excise taxes and duties were down CAD0.1bn. In addition, Employment Insurance premium revenues increased by CAD0.3bn (8.5%), which the Department says is consistent with the 2011 premium rate of CAD1.78 per CAD100 of insurable earnings.

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