Taxation Policies
In keeping pace with the federal government's announcement in 2000 that federal corporate tax rates would decrease to 21 percent from 28 percent by 2005, the newly elected provincial Liberals announced dramatic tax cuts to personal and corporate tax cuts to personal and corporate tax rates effective July 2001. All taxpayers received an average 25 percent reduction in personal income tax. British Columbians in the two lowest tax brackets began paying the lowest income tax rate in Canada effective January 1, 2002 and B.C. now has the second-lowest top marginal tax rate, dropping from 48.7 percent to 43.7 percent. Similarly, the corporation income tax rate fell from 16.5 percent to 13.5 percent effective January 1, 2002.
These tax reductions are in keeping with recommendations made by the BC Business Summit, of which BCTA is a member. The BC Business Summit was formed in 1998 to develop recommendations for the provincial government on how to improve BC's investment climate. It is composed of 54 business organisations.
International Fuel Tax Agreement
(IFTA) Decals
In 2000, at BCTA's request, the Ministry of Finance had increased the maximum number of IFTA decals available to carriers from a maximum of 5 sets to a maximum of 10 sets of decals.
In 2001, the Consumer Taxation Branch of the Ministry of Finance finally agreed to completely lift the cap on the number of International Fuel Tax Agreement (IFTA) decals it makes available to trucking companies.
TransLink & Transit Tax
BCTA scored a major victory and played a key role in the demise of the unpopular TransLink vehicle levy in 2000. TransLink was established in 1999 to be responsible for regional transportation, including roads and public transit, in the Greater Vancouver Regional District or GVRD. Unfortunately, TransLink instead decided to increase the transit tax by 2 cents per litre effective April 1, 2002 to raise about $43 million. (TransLink is obliged by legislation to have a balanced budget.)
BCTA unsuccessfully lobbied the provincial Minister of Transportation to exempt diesel fuel from this tax increase because it will:
- unnecessarily increase truck traffic as trucks attempt to avoid paying the tax
- negatively affect the card lock system in the GVRD.
Trucks already avoid purchasing diesel fuel in the GVRD. Only about 18 percent of diesel sold in the province is purchased in the GVRD.
Multi- Jurisdictional Tax
At BCTA's request, the Ministry of Finance agreed to provide an MJV tax refund or credit when an MJV is traded in to purchase another MJV and on short-term leases of motor vehicles used to replace an MJV while it is being repaired.