Canadian business groups, including the Canadian Chamber of Commerce, have retracted their statement about how many Canadians would be affected by proposed changes to capital gains tax.
According to Bloomberg, one in five companies, not individuals, would now be directly impacted.
When an asset is sold for more than its original purchase price, the difference between the selling and purchase prices is considered a capital gain.
These gains are typically subject to taxation, although the rate and rules vary depending on the type of asset, how long it was held, and the individual's tax jurisdiction.
The clarification was issued in response to questions raised about the initial assertion, which implied a more widespread impact on Canadians.
Proposed Changes To Capital Gain Tax
The federal budget, spearheaded by Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland, outlines a plan to increase the inclusion rate on capital gains above $250,000 for individuals, making a more significant portion of their gains taxable.
Additionally, there is a proposal to apply this new inclusion rate to all capital gains corporations realize.
Some argue that it is unfair because it targets a smaller portion of the population with higher incomes or significant investments, potentially burdening them with higher taxes.
VCPost earlier reported that Doctors in Canada are raising concerns over the changes to capital gains taxes, which could negatively impact their retirement savings in the future.
However, others also argue that it is fair to ask wealthier individuals and corporations to contribute more in taxes.
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