P.E.I. government says tax changes expected to save businesses $9.3M this fiscal year

A Halifax intersection has long caused confusion and congestion.

Prince Edward Island made changes to the general business tax rate and the small business tax threshold effective July 1.

The changes include decreasing the general tax rate for businesses from 16 per cent to 15 per cent and increasing small business income threshold by $100,000 to $600,000.

“This means every business operating in the province can claim more of their income under the lower rate of business tax and positions PEI as having the second highest small business income threshold in Canada,” a news release from the province said.

The Government of P.E.I. says these changes are expected to save businesses on the Island around $9.3 million this fiscal year.

“We’ve listened to our industry leaders and introduced these measures to support them in reinvesting in their companies, employees and communities,” Minister of Finance Jill Burridge said. “We enjoy being a small business friendly Island, and we’re building a competitive, resilient and more inviting corporate climate that is beneficial for our economy and for all Islanders.”

Personal tax changes for the Island also taking effect in 2025 include:

• Increased basic personal amount by $400 to $14,650
• Increased spousal and equivalent amount by $340 to $12,443
• Increased income threshold for low-income tax reduction by $400 to $22,650

Both corporate and personal tax changes were announced in the 2025-2026 provincial operating budget.

For more P.E.I. news, visit our dedicated provincial page.