VICTORIA – British Columbia’s government has introduced a new income tax for its liquefied natural gas industry that starts at 1.5 per cent and increases to five per cent, two per cent lower than the government had originally proposed.
Finance Minister Mike de Jong says the new tax structure is competitive and provides the certainty companies need to make final investment decisions in developing LNG plants in B.C.
He says the tax includes a reduced rate from what was announced last February in order to accommodate declining LNG prices and increasing construction costs.
De Jong says the new tax starts at 1.5 per cent and applies during the start-up phase of LNG developments, while a 3.5 per cent tax kicks in once the plants are in operation and capital investments are deducted.
Last February de Jong announced in the budget the government was looking at a 1.5 per cent start-up tax, followed by a tax as high as seven per cent.
De Jong says the tax, which rises to five per cent in 2037, ensures British Columbians receive a fair return on their natural resource.