KELOWNA, B.C.–The government of British Columbia has moved to reinstate a lower credit union tax treatment.
Previously, the lower tax rate was implemented in recognition of the fact that B.C. credit unions are in a unique position to reinvest capital back into the provincial economy, according to the Clearwater Times.
“A competitive tax environment enables credit unions to reinvest in a diverse provincial economy by creating quality, head-office jobs across the province, providing more financial support for community projects, and making more local lending decisions to help small businesses and individuals thrive,” the report stated.
According to the Clearwater Times, British Columbia had begun to phase out the small business tax rate on credit unions, with plans to increase it incrementally over a period of four years. In January 2017, the government announced it would defer additional increases, pending further consultation. Without the restoration of the credit union tax treatment, B.C. credit unions faced a tax increase of over $26 million annually.
“We see this recent budget decision as a signal that the BC Government recognizes the important contribution credit unions make to building strong, vibrant communities,” Kathy Conway, president and CEO of Interior Savings, told the Clearwater Times. “With this permanent tax change, we’ll have more money to lend to our members and to support local businesses and community development.”
In 2016, Interior Savings Credit Union returned $2.5 million to members through its Member Rewards special dividend.