2007 Economic Statement

On December 14, 2007, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007 and to implement certain provisions of the economic statement tabled in Parliament on October 30, 2007 received Royal Assent. The Act amends the Income Tax Act, the Excise Tax Act, the Excise Act, 2001 and the Air Travellers Security Charge Act to:

• cut the goods and services tax from 6% to 5%;
  • For more information, see GST/HST Notice 226 - Proposed GST/HST Rate Reduction in 2008.
  
  
• increase the basic personal amount to $9,600, retroactive to January 1, 2007;
  • For more information, see New Income Tax Measures for Individuals.
    
    
• reduce the lowest personal income tax rate from 15.5% to 15%, retroactive to January 1, 2007;
  • For more information, see New Income Tax Measures for Individuals.
    
    
• reduce the general corporate income tax rate to 15% by 2012, effective January 1 of each year as follows: 19.5% in 2008, 19% in 2009, 18% in 2010, 16.5% in 2011, and 15% in 2012;
  • For more information, see General Federal Corporate Income Tax Rate Reductions.
    
    
• reduce the small business income tax rate to 11% in 2008, one year earlier than scheduled;
  • For more information, see Federal Income Tax Rate Reduction for Small Business.
    
    
• increase the rates of excise duty on certain tobacco products; and
  • For more information, see Excise Duty Notice EDN17 Changes to Excise Duty Rates on Tobacco Products - January 1, 2008.
  
  
• impose a tax on certain excise duty-paid tobacco products held in inventory at the beginning of the day on January 1, 2008.
  • For more information, see Excise Duty Notice EDN16 - Proposed Tobacco Products Inventory Tax January 1, 2008.

The CRA’s forms and publications will be updated to allow taxpayers to take advantage of the new measures and to continue to meet their tax obligations.