SK - Effective January 1, 2007 the small business corporate income tax rate will be lowered from 5 per cent to 4.5 per cent. This announcement comes just days after the government announced a 2 percentage point cut in provincial sales tax.

The timing of these cuts coincides with a hot economy and the province's lowest unemployment rate since 1979. Statistics Canada figures released today show 501,700 people were working in the province in October*, up 21,800 over the figure for October 2005 and beats by 16,200 the old record for October set two years ago.

October's employment figures also represented the seventh straight month of record job numbers for the province.

The Government also introduced changes to the dividend tax credit (DTC). Effective for the 2006 taxation year, Saskatchewan will establish a new DTC on dividends received from larger corporations at a rate of 11 per cent. By increasing its DTC rate for larger businesses, Saskatchewan has now integrated with the changes announced in the May federal budget.

"These changes to the small business tax regime will improve the tax competitiveness in our small business sector and further encourage businesses to expand," Thomson pointed out. "Our government has introduced some of the most significant tax reforms in Saskatchewan history. Personal income tax reform has provided significant tax reductions for Saskatchewan people and lowered our marginal income tax rates. This year's reduction in both corporate tax and sales tax result in a further tax saving of over $500 million annually when fully implemented.

Further details on the dividend tax credit and small business threshold changes are available by calling Saskatchewan Finance at 1-866-862-6246.

* seasonally unadjusted figure

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