OTTAWA (Reuters) – Canada’s first budget in two years, presented to parliament on Monday, proposes a sales tax for online platforms and e-commerce warehouses, a digital services tax for web giants, and a luxury tax on things like yachts and the government. sources familiar with the said document.
It will not include a wealth tax, a levy demanded by the opposition New Democrats. Liberal Prime Minister Justin Trudeau’s budget needs the support of at least one opposition group to succeed.
“The government is not moving forward with a wealth tax at this point,” a government source told Reuters. “We will take meaningful steps to close loopholes and tackle tax evasion, and ask those who are doing well right now to pay a little bit more.”
The budget includes a sales tax for online platforms and e-commerce warehouses from July, and a digital services tax for large web companies from January 1, 2022, both measures originally promised last year.
Online platforms include foreign merchants with no physical presence in Canada who sell products such as mobile apps and online video games. E-commerce warehousing is the storage of physical goods before they are sold online.
A luxury tax on new cars and private jets worth more than C $ 100,000 ($ 79,970) and boats worth more than C $ 250,000 will take effect next year if the budget is exceeded. Campers and snowmobiles would be exempt from this.
With the country’s booming housing market, the government is proposing to tax vacant homes owned by non-resident, non-Canadian owners starting Jan. 1, 2022, sources said.
There will also be an effort to tackle jurisdiction shopping by large, profitable companies trying to artificially lower their tax liabilities in Canada, sources said.
Beginning in 2023, Canada aims to limit the amount of excessive interest expense that can be deducted from profits, although small businesses will be exempted.
In 2022 or 2023, the budget will propose limiting the ability of multinational corporations to artificially negotiate arrangements between countries that eventually lower their tax rates in Canada.
The sources did not provide details. Finance Minister Chrystia Freeland will present the budget Monday around 4:00 pm (2000 GMT).
Freeland offered her first budget since becoming Secretary of the Treasury last year, pledging up to C $ 100 billion in stimulus measures over three years to jump-start an economic recovery in what is likely to be an election year.
Separately, the Toronto Star reported on Sunday that Canada would set aside C $ 12 billion in its budget to expand its key pandemic support measures as much of the country faces a virulent third wave of COVID-19. infections.
Reporting by Steve Scherer; Editing by Peter Cooney