TAX CUTS OF 2008 MORE EFFECTIVE THAN FIRST ESTIMATED

New Calculations Show 92,000 People Came Off Tax Rolls - 12,000 More Than Expected

New calculations by the Ministry of Finance show that the tax cuts introduced by the provincial government in the fall of 2008 removed more people from the provincial income tax rolls than previously thought.

At the time, Finance estimated the increase to the basic personal exemption would mean 80,000 people would no longer have to pay provincial income tax. This calculation was based on a simulation model built around tax returns from 2006.

New information received from the federal government shows the 2008 tax reduction actually removed 92,240 people from the tax rolls. These were primarily lower income taxpayers.

"This shows our tax reductions were even more effective than we expected in terms of removing the tax burden on lower income people," Finance Minister Ken Krawetz said. "More than 92 per cent of those removed from the tax rolls had an annual income of $40,000 or less. More people in Saskatchewan are working than ever before, they are earning more than ever before, and thanks to these tax reductions, they are keeping more of the money they earn."

The federal data for the 2008 taxation year was received in August of 2010. Finance officials used that information to build a simulation of the 2008 tax system as it was before the increased exemption came into effect and compared it to the actual number of tax filers in 2008.

The comparison shows that 92,240 more people would have paid tax in 2008 if the tax reduction had not been introduced.

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For more information, contact:

Randy Burton
Finance
Regina
Phone: 306-787-6578
Email: randy.burton@sk.gov.ca
Cell: 306-530-2049