Types of Taxes

Income Tax

There are both provincial and federal income taxes. The deadline for filing your taxes for the previous year is April 30.

Sales Tax

This is a tax on the purchase of goods and services. There is a federal tax (goods and services tax) and a provincial tax (provincial sales tax). There is a combined goods and services tax in many provinces called the Harmonized Sales Tax (HST).

In some provinces such as Alberta, there is no provincial tax so they only pay the federal portion of the tax.

Excise Tax

Excise taxes are imposed on the sale of luxury goods or non-essential goods such as tobacco, liquor.

Custom Duties

Customs duties are collected on goods that are brought into the country. There are many international trade agreements that reduce customs duties such as the North American Free Trade Agreement (NAFTA).

Property Taxes

Property taxes are one form of tax that is reserved for the municipal level of government. Each year, a town/city plans their budget and determines how much each homeowner must pay in taxes. Municipalities provide most of the obvious goods/services such as snow removal, policing, water, garbage collection, and fire protection.

Progressive Tax

Progressive tax is a taxing mechanism in which there are more taxes as the income of the taxpayer increases. A higher tax rate is collected from the taxpayers who earn more and a lower rate from taxpayers earning less. Income tax is an example of a progressive tax.

Regressive Tax

Regressive tax is a tax that takes a larger percentage from low-income people than from high-income people. A regressive tax is generally a tax that is applied uniformly. This means that it hits lower-income individuals harder. Sales taxes are an example of a regressive tax.