According to the latest data from the Ministry of Finance of Canada, from April 2019 to March 2020, the Canadian cannabis consumption tax reached 32 million Canadian dollars ($23.7 million).
Although cannabis taxes only account for a small portion of the Canadian government’s total tax revenues (CA$334.3 billion) over the same period, it illustrates the increase in Canadian cannabis taxes.
Canada’s cannabis consumption tax is levied by the federal government, which holds 25%, and the remaining 75% is shared with the provincial government.
In May of this year, British Columbia reported that the province’s cannabis consumption tax revenue in December reached a record of 2.5 million dollars, thanks to the newly opened legal cannabis store in the province.
As more stores across the country open for business, consumption tax is expected to increase.
Licensed cannabis producers pay consumption tax when the product is delivered to the purchaser (usually a provincial wholesaler).
In addition to the consumption tax, the Canadian government also derives income from the regular sales tax on cannabis.
The government also charges a 2.3% annual regulatory fee for companies holding standard cannabis licenses. This fee is to offset the cost of regulating cannabis production.
The Canadian Chamber of Commerce’s National Marijuana Working Group requested the Canadian government to temporarily waive part of the fee in 2020 to support the country’s cannabis industry during the COVID-19 pandemic.
The organization stated in a letter: “Health Canada is in a position to help the industry weather the impact of the crisis and position it for success afterward by providing license holders temporary relief by waiving payment of the 2.3% annual regulatory fee.”
This article is issued by Mjbiz Daily.