Saturday, April 13, 2024

Tax injustice to small business owners

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Maria Gill
Maria Gill
"Subtly charming problem solver. Extreme tv enthusiast. Web scholar. Evil beer expert. Music nerd. Food junkie."

I can’t wait to see if Finance Minister Eric Girard, in his budget next Tuesday, will correct the tax injustice suffered by 38,000 Quebec small and medium businesses.

These are small companies in the construction and service sectors with paid employees working less than 5,000 hours per year, which equates to less than three full-time employees.

Not only does François Legault’s government prevent them from taking advantage of tax breaks intended to help small and medium-sized businesses struggling with a labor shortage, but it also prevents these 38,000 small businesses from taking advantage of the reduced reduced tax offered to small and medium-sized businesses in Quebec, known as SBD (Discount for small businesses).

The provincial tax rate applicable to taxable income that led to the personal insurance permit being obtained is 3.2%. This is 8.3 percentage points lower than the general tax rate of 11.5% that Quebec applies to businesses that do not qualify for a high school diploma.

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This means that these 38,000 SMEs in Quebec must pay a regional tax rate 3.6 times higher than those of SMEs eligible for a high school diploma.

“You have to face it, it doesn’t make sense and it is simply outrageous!” says François Vincent, Vice President of the Canadian Federation of Independent Business (CFIB) in Quebec.

« Le gouvernement du Québec imposes non seulement ces petites entreprises comme des multinationales, ajoute-t-il, mais en plus il leur bloque l’accès à deses cruciales pour qu’elles puissent affronter la crise de la pénurie de main-d’ artistic work. How can we imagine an unfavorable tax policy for small businesses? »

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It is based on a survey of its members that CFIB appeals to François Legault and the Minister of Finance to correct the tax inequality plaguing 38,000 small businesses operating in the construction and services sectors.

The two main demands of CFIB members are: “Reduce taxes (which 57% of members want) and improve tax credits for companies to allow them to offer better working conditions (requested by 49% of members). »


This is even more frustrating for our 38,000 small businesses that don’t have access to a reduced SBD tax rate, while elsewhere in the country these businesses are entitled to absorb tax rates of anywhere from 2 3%, depending on the county.

When the Quebec government subjected small and medium-sized companies in the construction and services sectors to the famous standard of a minimum “5,000 paid hours” to access DPE, it was specifically targeting professionals (including doctors) set up for the purpose of paying provinces lower wages. tax.

the problem ? By acting in this way, Quebec has done a huge disservice to the vast majority of small businesses, by treating them financially like multinational corporations.

Certainly not by penalizing 38,000 small Quebec companies in the construction and service sectors in this way, François Legault will close the wealth gap we have with Ontario.

Legault’s government’s desire to deny access to the DPE to integrating physicians is a socially defensible government action. But preventing small businesses from accessing DPE is unacceptable!

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