Thank you, Madam Chair. I am here to present Bill 16, An Act to Amend the Income Tax Act. The main purpose of Bill 16 is to reduce the tax burden on our small businesses by reducing the small business tax rate from 4 percent down to 2 percent. With this reduction, Northwest Territories small businesses will incur a tax rate of 2 percent on taxable income under $500,000. Any taxable income over $500,000 will continue to be subject to the general corporate tax rate of 11.5 percent. This proposed measure will become effective on January 1, 2021.
We are also taking this opportunity to propose two housekeeping measures to keep the legislation current and maintain value harmonization with federal income tax legislation. The first housekeeping measure proposes changes in the calculation of the territorial age credit to include taxable split income to ensure seniors are not able to claim a higher age credit than they would otherwise be entitled. The second housekeeping measure proposes changes in the calculation of the territorial pension credit. This measure will allow Canadian veterans with certain income benefits received under the federal Veterans Well-being Act to claim the territorial pension credit.
That concludes my opening remarks, Madam Chair. I would be happy to answer any questions that Members might have.