Budget Bulletin: Tax on Income

Starting in the 2000 taxation year, Nova Scotia will move to a tax on income system of assessing personal income tax. The new system will apply a Nova Scotia tax to the federally determined taxable income. The previous system applied provincial tax as a percentage of federal tax.

Nova Scotia will set tax on income rates for the 2000 tax year to be equivalent to the effective tax-on-tax rates in place in 1999. Nova Scotia will also use the 1999 brackets to determine when the rates apply.

In addition, Nova Scotia will also adopt the federal non-refundable credit amounts for the 2000 taxation year, including the enhancements made for the 2000 taxation year in the Feb. 28 federal budget. These credits include the basic personal amount, spousal amount, age credits, CPP, and EI premiums credits, tuition and education amounts, and all other federal non-refundable credits.

These measures combined result in a tax cut to Nova Scotians of approximately $7.5 million. Nova Scotians will pay no more tax in 2000 than they did in 1999 on the same amount of taxable income, assuming all other factors remain constant.

NOTE: For other 2000-01 budget information, visit the Department of Finance website at www.gov.ns.ca/finance .