Cash Cow or Red Herring?
There has been a lot of chatter about the recent proposal to close the tax exemption for “entertainment/marketing” costs associated with sports/arts tickets purchased by profitable companies.
The truth is, it is not going to make any difference, either way, for anyone. If the loop-hole closes, the Government won’t collect one dollar more, the Sens won’t sell one less ticket, and the companies won’t skip one opportunity to show off to their clients.
The tax write-off is minuscule. Companies are not motivated to buy these tickets to gain the tax write off, it’s merely a bonus. As such, if the effort is good for business, they will continue to buy tickets, just like if it were not, they would not. The tax write-off is NOT the deciding factor.
The government will not gain any more tax revenue because these companies will just spend this money on a different tax-exempt expense…and there a MANY to chose from. If the government were closing all exemptions, then yes, it would provide an impact, but to close one, while leaving the other 99.9% active…it will make ZERO difference to the province.
This entire issue smacks of political posturing. The government will take the path that earns them the best public opinion, knowing that, at the end of the day, it has neither cost nor gained anyone anything, but themselves.