CBC News Online | April 7, 2005
The province is making a small adjustment to the corporate tax rate in an effort to stimulate growth in the province. It will drop one percentage point to 6.5 per cent.
This budget also allows seniors to collect more income before they have to start paying property taxes. The minimum income threshold is increased to $30,000 from the old level of $22,000.
It also includes a measure to encourage Islanders to head off the electricity grid. Renewable energy equipment purchases will be exempt from the provincial sales tax.
However, the budget also includes a number of measures to generate revenue for the province.
The Binns government plans to make $6.5 million this year by charging the provincial sales tax on gasoline and diesel fuel. This means the tax rate will fluctuate, but the government would only say that the prices Islanders will pay would remain below the charges on the mainland.
- Real estate licences increase by $100
- Farmers will have to pay for fishing licences
- Insurance operating licences increase by $50 to $300
"Even with this change we will remain to have the lowest gas prices in the country."
Murphy explained the change would add 2.3 cents to the 90.3 cents per litre price at midnight on April 8.
Islanders will be paying more the next time they buy a set of tires. The tire tax will double to $4 per tire.
The government is also introducing a new Land Transfer Tax. However, the government said it would not apply the tax within families. Murphy reasoned that would allow a farmer to transfer land to a child without having to pay extra fees.
The government is looking at what that tax rate will be.