Ryan Tax Alert – Newfoundland Budget 2007

On April 26, 2007, the Honourable Thomas Marshall, Minister of Finance, presented the Newfoundland and Labrador 2007 Budget. For the first time in the province’s history, as a result of a strong economy and expanding natural resources sector, the province was able to forecast a budget surplus and announce its largest reduction in personal income taxes ever.

There were only two changes introduced with respect to commodity taxes.

Retail Sales Tax on Used Vehicles

Effective April 27, 2007, the Retail Sales Tax levied on the private sale of a used vehicle in the province will be reduced to 14 per cent from 15 per cent. This change reflects the one per cent reduction in the federal portion of the HST that occurred on July 1, 2006.

Foreign Convention and Tour Incentive

The Minister announced that Newfoundland and Labrador will participate in the GST/HST Foreign Convention and Tour Incentive Program, introduced by the Federal Government to replace the Visitor Rebate Program and becoming effective April 1, 2007. This program will provide relief from HST in respect of supplies related to conventions held in Canada and the accommodation portion of tour packages provided to non-residents.

Fee Reductions

The province also announced that over 170 fees, mainly related to licenses, have either been eliminated or reduced in the current year as part of the “Red Tape Reduction” project.

Full details on the 2007 Newfoundland and Labrador Budget are available on the province’s web site at: Newfoundland Budget 2007.

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