PBO report shows tax changes remain costly and deeply confusing
March 8, 2018 – The Parliamentary Budget Officer (PBO)’s report on income sprinkling released today confirms what groups like the Canadian Federation of Independent Business (CFIB) have been saying all along: the tax changes are overly complicated and the government has drastically underestimated the impact and cost of its new tax rules.
“In addition to finding the government will be taking twice as much from businesses than projected just days ago in the 2018 budget, the PBO report reveals it is nearly impossible to figure out who will be potentially affected,” said Dan Kelly, CFIB president. “If Finance and the PBO struggle to figure out who will be whacked with higher taxes, God help us when this hits the CRA!”
“Quite apart from the increased tax burden these measures bring to family-run businesses, our even bigger concern is that small firms will have no idea whether they will ultimately pass the tests or not,” added Kelly. “Once the audits start in a few years from now, business owners are not going to have the documentation to prove whether or not they pass the ‘bright line’ or ‘reasonableness’ tests, resulting in added red tape and years of tax court battles across the country.”