Analysis of Revenues Administered on Behalf of the Government of Canada

Federal income tax revenues were $8.6 billion higher in 2003-2004 than in 2002-2003. Personal income tax revenues increased $3.6 billion, while corporate income tax revenues increased $5.2 billion. Other income tax revenues decreased $149 million. The increase in personal income tax revenues is due to higher employment and labour income, adjusted for the impact of tax reduction measures announced in previous budgets. The corporate income tax revenue increase results from the strong rebound in corporate profits in 2003, particularly in the financial sector, as well as lower refunds pertaining to prior-year assessments.

There was a decrease of $100 million in other taxes and duties. GST revenues declined $128 million, reflecting a decline in gross receipts from imports and strong growth in rebates. Customs duties decreased $334 million, reflecting the impact of the appreciation of the Canadian dollar on the value of imports. The remaining taxes and duties were $361 million higher, mainly attributable to tobacco duty as a result of the introduction of the new Excise Act in July 2003.

EI premiums decreased $343 million as the reduction in premiums more than offset the increase in the number of people employed.

Exhibit 2 Revenues 2003-2004

Date modified:

2004-10-28