Wasseem Dirani Examines the Canadian Taxation System

How Does the Canadian Government’s Revenue Break Down?

Wasseem Dirani from Hamilton, Ontario, Discusses Canadian Taxes

What Types of Tax Does the Canadian Government Collect?

The following are the major types of taxes collected by the federal, provincial, and local governments in Canada as stated by Wasseem Dirani:

Personal Income Tax

As stated above, the largest portion of the Canadian government revenue comes from the personal income tax. The Canadian tax system is a progressive system where high-income taxpayers pay a higher percentage of their income than lower-income taxpayers.

Corporate Income Tax

Corporate income tax forms a relatively small part of the Canadian revenue system. Canada requires that corporate taxes be paid before the profits are passed along to shareholders as a dividend. In Canada, firms with operations in more than one country pay Canadian income taxes on their total global income.

Payroll Taxes

Payroll taxes provide an important source of support for the Canadian worker. Many worker support programs like pension plans and unemployment insurance are paid by these taxes.

Wasseem Dirani from Hamilton, Ontario, Explains Sales Tax

Sales Tax

Sales tax in Canada varies a great deal by province, notes Wasseem Dirani. The federal government collects a tax of 5 percent on all goods and many services. Several provinces charge a Harmonized Sales Tax. Taxes range from the federal sales tax only in Alberta (5 percent) to a high of 15 percent in New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador.

Excise Taxes

Provincial governments and the federal government charge excise taxes. Some of the items taxed under excise taxes include vehicle air conditioners, cigarettes, alcohol, and gasoline. Canada charges one of the highest excise taxes globally on alcohol and tobacco. The logic behind this tax is that it is thought to reduce the healthcare expenditures of the Canadian government.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Wasseem Dirani

Wasseem Dirani

Wasseem Dirani of Hamilton, Ontario, is the President of Taxes to Save. He and his company pride themselves in providing excellent tax consulting services.