As we approach the release of Canada’s federal budget next week, many are wondering if new taxes will be unveiled to help address the country’s growing fiscal deficit. To get insight into this question, we spoke with Dino Infanti, Partner and National Leader of Enterprise Tax at KPMG.
Background on Budget Expectations
The Canadian government has been under pressure to introduce new measures to reduce the national debt, which has grown significantly over the past few years. With a federal deficit projected to reach $85 billion this fiscal year, there is growing concern about the need for increased revenue generation through taxation or other means.
Potential Taxes in the Budget
In our conversation with Dino Infanti, we asked him if he expected new taxes to be introduced in the upcoming budget. According to Infanti, while there has been some speculation about possible tax increases, it remains unclear what specific measures will be announced.
"It’s difficult to predict exactly what will be included in the budget," Infanti explained. "However, as a national leader of Enterprise Tax at KPMG, I can say that we’ve seen a trend towards increased focus on corporate taxation and wealth inequality."
Corporate Taxes and Wealth Inequality
One potential area for tax reform is corporate taxation. As the global economy continues to shift and corporations become increasingly mobile, governments are under pressure to ensure they’re not losing revenue due to tax avoidance schemes.
"We’ve seen an increase in anti-avoidance measures globally," Infanti noted. "Governments are trying to prevent companies from shifting profits to low-tax jurisdictions or exploiting loopholes."
Wealth inequality is another area that may be addressed through taxation. With the gap between the rich and poor growing in many countries, governments are looking for ways to redistribute wealth and ensure everyone contributes their fair share.
Possible Tax Increases
While it’s unclear what specific tax increases will be introduced, there are several possibilities being considered. These include:
- Increased corporate tax rates: Governments may look to increase the corporate tax rate to capture more revenue from large corporations.
- Wealth taxes: A wealth tax could be introduced to target the wealthiest individuals and redistribute their wealth more evenly throughout society.
- Carbon pricing: As governments worldwide increasingly recognize the importance of addressing climate change, carbon pricing is becoming a popular solution.
Implications for Canadians
The introduction of new taxes can have significant implications for Canadians. If tax increases are implemented, it could lead to higher prices for goods and services, potentially decreasing consumer spending power.
"It’s essential for governments to consider the potential impact on individuals and businesses when introducing new taxes," Infanti emphasized. "A balanced approach is needed to ensure that revenue generation doesn’t come at the expense of economic growth."
Conclusion
The upcoming budget will undoubtedly be closely watched by Canadians, investors, and policymakers alike. While it’s unclear what specific measures will be announced, one thing is certain – change is coming.
As Dino Infanti so aptly put it, "The world is changing rapidly, and governments need to adapt to remain relevant."
About the Author
Dino Infanti is a Partner and National Leader of Enterprise Tax at KPMG. With over two decades of experience in taxation, he provides guidance to clients on complex tax issues and advises on corporate taxation strategy.
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