In addition to yachts and high-end vehicles, business, personal, and other general aviation aircraft remain in the Canadian government’s luxury tax proposal. The tax is included in the government’s federal budget, which has been pending for two years but is now expected to be enacted, with the luxury tax taking effect on Jan. 1, 2022.
The Canadian Business Aviation Association (CBAA) has been fighting the tax since it first appeared in the proposed budget in 2019. In its latest protest, the CBAA said the government’s assumption that a “small airplane is an unessential, high-end toy totally misrepresents how these aircraft are generally used.”
According to CBAA president and CEO Anthony Norejko, “Small aircraft have been a niche tool to deliver personnel, food and supplies, equipment, and other essential services to communities of all sizes, many of which have only the most basic airstrip for landing and takeoff.”
Norejko added, “The possibility of a new tax is not only unfair but can have the perverse effect of stifling an area of economic growth and reduce the ability of Canadians to conduct business and connect by using aircraft.”
A luxury tax is a sales tax or surcharge levied only on certain products or services that are deemed non-essential or accessible only to the super-wealthy. The luxury tax may be charged as a percentage of the purchase price, or as a percentage of the amount above a specified level.
Such goods include expensive cars, private jets, yachts, jewelry, and much more. Luxury tax is “an indirect tax that increases the price of a good or service and is only incurred by those who purchase or use the product”.
In Nigeria, the Luxury Tax Law is yet to be signed into Law due to legal protocols required to be met before the take-off of the policy according to the Minister of Finance, Kemi Adeosun as government is yet to perfect plans to commence the collection of luxury taxes as soon as the legal processes have been resolved.
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