just like in any country, Income taxes constitute the majority of the annual revenues of the Government of Canada, and of the governments of the Provinces of Canada. In the fiscal year ending 31 March 2018, the federal government of Canada collected just over three times more revenue from personal income taxes than it did from corporate income taxes.
The Canadian tax system includes the following taxes:
- Federal income tax: a progressive tax system based on an individual’s income.
- Provincial Sales Tax (PST): a consumer tax.
- Goods and Services Tax (GST): a tax on goods and services.
- Property Transfer Tax: a tax on the transfer of property.
- Taxes as a non-resident of Canada.
The Canada Revenue Agency (CRA) is responsible for making sure all tax laws are followed in Canada. Taxes are imposed on individuals, business firms, and property, and are used to finance public services or enable governments to redistribute resources.
How much do Canadians pay in taxes?
Canadians pay 42.5% of their income in taxes. Last year, the average family earning $83,000 paid approximately $35,000 in taxes. The taxes you pay in Canada are determined by various criteria, including your province or territory of residence, income, and any deductions or credits you may be qualified for. The federal government collects taxes on behalf of all provinces and territories, and the tax rates vary depending on the province or territory in which you reside.
Why is paying taxes important in Canada?
The contributions you make through your taxes are essential in helping fund many things from building roads and bridges to Canada’s education and health care system. Paying taxes is a fundamental part of being a responsible citizen, as well as an obligation.