April 18, 2024
“Most First Nations are still mired in poverty. The First Nations that have succeeded seem to have aggressively exploited local economic opportunities”: Flanagan

Study argues for end of First Nations’ income tax exemption

A recent analysis by the Aristotle Foundation for Public Policy argues that the time has come for the federal government to remove its income-tax exemption for First Nations people.

Tom Flanagan, an emeritus professor of political science at the University of Calgary wrote the report, titled, The Section 87 Indian Act taxation exemption: An analysis. The study examines the pros and cons of the income tax exemption for First Nations people

The exemption is relatively new in Canada’s history, explains Flanagan.

It wasn’t until Nowegijick v. The Queen, a 1983 Supreme Court decision that ruled in favour of appellant Gene A. Nowegijick, that he should be exempt from paying federal income tax on income earned while living on a reserve.

The decision to revise s. 87 of The Indian Act extended to include not only income earned but also purchases made by Indians on reserves.

“This special privilege applying to the approximately one million Registered Indians in Canada has no logical foundation and serves no obvious purpose of public policy. Its main outcome has been to generate resentment by the other 39 million Canadians who are required to pay taxes on income and sales,” reads the analysis.

Initially, the federal government applied property tax exemptions to First Nations to prevent provincial governments from being able to seize reserve land on the basis of unpaid taxes.

The more recent exemptions on income earned were a result of court cases and not actual modifications to The Indian Act implemented by Parliament.

Interesting Read…

See Also:

The Idiot’s Guide to First Nations Taxation

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Jack’s Note: If it ain’t broke don’t fix it!



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