On June 25, 2019, Minister of Finance, Darlene Compton, presented the 2019 Prince Edward Island budget, revealing a modest surplus of $1.8 million. Increased revenues from sales tax and income tax, both personal and corporate, have contributed to a positive outlook for the provincial economy. This year’s budget includes spending increases for education, families, and healthcare.
No new taxes or tax increases were introduced in this year’s budget, but a few interesting income tax announcements were made, as noted below.
Small Business Income Tax
This year’s budget proposes to lower the small business income tax rate to 3%, a reduction of 0.5%, beginning on January 1, 2020. It is anticipated that roughly 2,600 small businesses will benefit from this tax reduction, and this is the fourth straight year that the small business income tax rate has been reduced.
Personal Income Tax
The budget reasserts a commitment to raise the basic personal income tax amount to $10,000, commencing on January 1, 2020. Comparable adjustments will be made to the spouse and equivalent-to-spouse amounts. In addition, the province is proposing to increase the low-income threshold from $17,000 to $18,000, effective the same date. It is projected that 1,700 additional residents of Prince Edward Island will no longer pay provincial income tax due to the proposed changes.
Additional information on the 2019 Prince Edward Island budget is available on the province’s website at: