GOVERNMENT SMALL BIZ RULE CHANGE COULD BRING IN BILLIONS

Nov 23, 2017

By Michael Kramer

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Parliament’s budget overseer has come up with an estimate on how much the federal government could rake in – thanks to a tax rule change for incorporated small businesses.

A parliamentary budget office report concludes that changes to “passive investment” rules – would add up to one-billion dollars to government coffers in the first couple of years – and that could rise to as much as four-billion in 10 years – and up to six-billion in 20 years.

The rule changes are aimed at ending the ability of wealthy individuals to use incorporation – to gain what the government maintains is an unfair tax advantage.

The most contentious proposal would limit the ability of a corporation to make so-called “passive investments” in items  that are unrelated to the business such as real estate.

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