Budget Bulletin: Tax Reduction Revised to Protect Priorities

FINANCE--Budget Bulletin: Tax Reduction Revised to Protect Priorities

The province will adjust the 10 per cent personal income tax reduction to ensure that necessary funding is available for Nova Scotians' two top priorities: health and education. While the province budgeted for a tax cut, it did not anticipate the shortfalls in federal transfer payments or in the federal budget that was tabled last month.

The adjusted rates will be in effect for the 2004 tax year; payroll deductions will change effective July 1, 2004.

The tax reduction adjustments are designed to ensure that low income Nova Scotians will be those least affected by the adjustment. At the other end of the earning spectrum, the high income surtax remains in effect.

Most Nova Scotians will continue to benefit from some tax reduction, even after the adjustment. All tax filers save 10 per cent on their first $29,590 of earnings.

CAREGIVER AND DISABILITY SUPPORTS IMPROVED
Caregivers will be allowed to claim more medical- and disability-related expenses that they incur on behalf of dependent relatives.

As well, people with disabilities who incur expenses for employment or educational purposes will be able to deduct these expenses from their income instead of claiming a medical expense tax credit.

Employees taking post-secondary education will be eligible for a tax credit on non-tuition related expenses. Service men and women serving in areas of conflict will benefit through provincial tax adjustments in keeping with recently announced federal changes.

NOTE: For further 2004-05 budget information, see the Department of Finance website at www.gov.ns.ca/finance .