Tax changes provide relief and assistance for Islanders affected by the pandemic
The provincial government will make tax changes so that Islanders and businesses can keep more money in their pockets as the province continues to recover from the effects of COVID-19.
The changes are effective January 2022 and include:
- Increasing the basic personal income tax exemption to $11,250;
- Increasing the low-Income reduction threshold to $20,000; and
- Reducing the small business tax rate to 1 per cent, the lowest in the Atlantic Provinces.
These changes are the latest in a series of reductions implemented by Government leaving $7.4 million in the hands of Islanders annually.
“These changes will have a positive impact on every Islander in one way or another and will keep more money in their pockets. We will continue to provide assistance and relief to support our most vulnerable and help our Island businesses and industries as we move towards recovery and growth in our economy.”
- Finance Minister Darlene Compton
”The reductions to the provincial small business tax rate will help support many Island businesses once the effects of the pandemic are behind them and profitability is once again achieved,” said Louis-Philippe Gauthier, Senior Director, Legislative Affairs, Atlantic with the Canadian Federation of Independent Business. “Prince Edward Island is leading the Atlantic region in this regard, and this is a welcomed tone set by government.”
These tax initiatives were included in the recent 2021-2022 provincial budget.
Islanders are also reminded that for the upcoming 2021 tax year, they can claim the $500 Children’s Wellness Tax Credit announced last year for expenses on their children’s activities that promote wellness.
Department of Finance