Changes to Manufacturing and Processing Tax Credit

Changes to Nova Scotia's manufacturing and processing tax credit that were first announced in the 2000-01 budget will be made effective Jan. 1, 2001.

The credit applies to eligible investment in new manufacturing and processing plant equipment. The investment must be subject to a legal agreement and must meet other criteria in order to be eligible. If more than half of the capital cost of an investment is made before Jan. 1, the entire investment will be eligible for a 30 per cent tax credit. If the investment is 50 per cent or less complete by Jan. 1, the portion that has been invested by that date will be eligible for the 30 per cent credit. The remainder will be eligible for a 15 per cent credit.

The manufacturing and processing tax investment credit was introduced in 1997 to encourage new and expanded manufacturing and processing investment in Nova Scotia. To October 1999, approximately $318 million worth of investments had qualified for the credit.

This was one of six tax credits and rebates evaluated during the first phase of the Nova Scotia Tax Credit Review. Evaluation of the remaining credits and rebates will be completed for the 2001- 02 budget.