Feds un­veil plans to tar­get tax ad­van­tages reaped by busi­nesses

The Guardian (Charlottetown) - - BUSINESS -

OT­TAWA — The fed­eral gov­ern­ment is propos­ing sev­eral mea­sures to close loop­holes for pri­vate cor­po­ra­tions it says en­able many Cana­di­ans to “un­fairly” re­duce how much tax they pay.

The Lib­er­als un­veiled plans to­day aimed at pre­vent­ing some busi­ness own­ers, par­tic­u­larly wealthy ones, from dis­tr­but­ing their in­come among fam­ily for tax-sav­ings pur­poses, even if those rel­a­tives are not in­volved in the busi­ness.

The Fi­nance Depart­ment be­lieves about 50,000 fam­i­lies in Canada are en­gaged in the prac­tice known as in­come sprin­kling.

The fed­eral gov­ern­ment also re­leased pro­pos­als to tar­get those who gain tax re­lief through pas­sive in­vest­ment in­come and by con­vert­ing their in­come into cap­i­tal gains, which are taxed at a lower rate. The gov­ern­ment is launch­ing a 75-day pub­lic con­sul­ta­tion pe­riod to al­low stake­hold­ers to ex­am­ine and weigh in on the three pro­pos­als. The feds be­lieve the pro­posed mea­sures could gen­er­ate sig­nif­i­cant amounts of rev­enue, with the plan to ad­dress in­come sprin­kling pro­vid­ing an es­ti­mated $250 mil­lion per year.

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