On March 7, 2023, the Government of Manitoba presented its 2023 Budget, projecting a shortfall of $378 million for the 2022-23 fiscal year and a shortfall of $363 million for the 2023-24 fiscal year.
Although no corporate or personal income tax rate changes were announced, the budget contains tax measures affecting both individuals and corporations.
Personal Income Tax
The budget contains changes to the tax bracket thresholds, increasing them from $36,842 and $79,625 in 2023 to $47,000 and $100,000 respectively for the 2024 tax year. Starting with the 2025 tax year, the bracket thresholds will return to annual indexing.
The budget further increases the basic personal amount from $10,855 to $15,000 for 2023 and future years, matching the federal threshold.
The budget did not contain proposed changes to the corporate income tax rates and the small business limit will stay at $500,000.
Starting in 2024, the exemption threshold for the Health and Post-Secondary Education Tax Levy, commonly known as the payroll tax, is increased from $2 million to $2.25 million of annual remuneration, making more businesses exempt from this tax. Further, the remuneration threshold below which employers pay a reduced effective tax rate under the Health and Post-Secondary Education Tax Levy is increased from $4 million to $4.5 million.
Other measures include making permanent both the Mineral Exploration Tax Credit and the Green Energy Equipment Tax Credit, which were previously set to expire respectively on December 31st, 2023 and on June 30th, 2023.
The budget also outlines plans to expand the eligible labour expenditures for the Interactive Digital Media Tax Credit, effective April 1st, 2023. The expansion will not include expenditures such as bonuses tied to profits or revenues, stock options and signing bonuses, which will remain ineligible for purposes of this credit.
The Education Property Tax Rebate will increase from 37.5 percent to 50 percent for 2023 for residential and farm properties. The rebate for other properties will remain at 10 percent.
For additional details, please click here to access Budget 2023.
Fillmore Riley LLP's Taxation Practice
We offer tax advice to both individual and business clients on a wide range of matters, including corporate and commercial transactions, estate planning, and tax dispute resolution and litigation. For more information, or if you have any questions, please contact a member of the Fillmore Riley Taxation practice.