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Common myths about First Nations #2 : Tax Exemptions

by Tosh Southwick
February 23, 2011

Common myths about First Nations #2 : Tax Exemptions

In continuing with the goal of dispelling common misconceptions about First Nations, I thought this week I would write about another frequent question that highlights an area of misunderstanding:

Why don’t First Nations in Canada pay taxes? Oh but they do…

Some people believe that all First Nations in Canada are tax exempt; the reality is that a majority of First Nations people in Canada and especially the Yukon pay taxes. There are laws that allow for tax exemption that applies to the income of a First Nation person that is earned on a reserve, as well as to goods bought on, or delivered to, a reserve.

The key to this misconception is that the majority of First Nations in Canada do not live and/or earn an income on a reserve. According to the 2001 census only 30% of First Nations lived on a reserve, meaning that at least 70% of First Nations in Canada pay taxes.

Here in the Yukon all Self-Governing First Nations have exchanged tax exemption for other benefits in the Final Agreements. So 11 of the 14 First Nations and their Citizens are no longer tax exempt and pay taxes like any other Canadian.

For more information: http://www.cra-arc.gc.ca/brgnls/stts-eng.html

As always we are looking to answer any questions people might have so please post or e-mail the FNI department if you have a question or topic you would like to see us visit.

 

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