AUSTRALIA'S proposed new tax on its resources industry could be a huge competitive advantage for Canada, according to that country's finance minister, Jim Flaherty.
Speaking to the media ahead of a speech to a public-policy forum on pension reform, Mr Flaherty said overnight that the continued decline in corporate taxes in Canada was a “great attraction for investment”.
Mr Flaherty said he still needed to closely review the tax proposed by Australia's government to fully understand how it worked. Like Australia, Canada has a very large and active resource industry.
Kevin Rudd’s Labor government announced plans to make mining giants liable for a tax on profits made from the exploitation of non-renewable resources. The extra revenue will be used to lower other corporate taxes.
Mr Flaherty noted that Canada had been reducing its corporate tax rate, and corporations in most of Canada would face a combined 25 per cent tax rate by 2012.
He said the “easiest thing” for a politician to do is raise taxes, which immediately increases revenues, but limits growth.
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