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Poor Income Tax Revenues Hit Canadian Deficit Figures

by Mike Godfrey, Tax-News.com, Washington

01 June 2016


A 9.4 percent fall in Canadian income tax revenues in March helped push the budgetary deficit up to CAD9.4bn (USD7.2bn) for the month.

This figure compares to a CAD3bn deficit in March 2015. Revenues decreased by CAD5bn year-on-year, and government program spending increased by 4.4 percent.

Revenues in March 2016 totaled CAD24.1bn. Corporate tax revenues were down 37.3 percent in the month. The Finance Department explained that companies are generally required to remit monthly installment payments for the current year based on either their previous year's actual tax liability or their current year's projected tax liability. It said that this practice can introduce a "lag" in the impact of economic events on monthly corporate tax revenues, which only "unwinds" near the end of the fiscal year.

The falls in personal, corporate and non-resident income tax revenues were partially offset by a 15 percent increase in excise taxes and duties in March.

For the April to March period of the 2015-16 fiscal year, there was a budgetary deficit of CAD2bn, compared to a surplus of CAD2.9bn during the same period in 2014-15. Personal tax and corporate tax revenues were up by 3.3 percent and 6.3 percent, respectively. Excise taxes and duties were up 8.2 percent.

TAGS: tax | budget | corporation tax | excise duty | ministry of finance | Canada | revenue statistics | individual income tax

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