PBO estimates that the Budget 2016 decision to defer reductions in the small business tax rate will reduce federal revenues by $45 million in 2016-17, and increase revenues by $155 million in 2017-18 rising to $815 million in 2020 21 (Summary Table 1). The initial reduction in revenues reflects timing differences in the tax reference years related to the filing deadlines for personal and corporate income tax returns.
Summary Table 1 – Fiscal impact of changes to the small business tax rate
PBO estimates that by 2020-21, Budget 2016 changes to the small business tax rate will reduce real GDP by $300 million (0.015 per cent) and the level of employment by about 1,240 jobs created or maintained (Summary Table 2).
Summary Table 2 – Economic impact of changes to the small business tax rate