An amendment to the Income Tax Act is being proposed to allow tradespersons and apprentices to deduct travel expenses for jobs located at least 80 km from their homes, beginning in the 2022 tax year. This deduction is contingent upon certain conditions, such as the worker being required to pay for travel as per their employment contract and not receiving an exclusionary allowance.
Tradespeople and indentured apprentices who often travel long distances for work may benefit significantly from this amendment, allowing them to reduce their taxable income due to travel-related expenses. However, those who do not work in construction or trades may see no direct benefit. Additionally, this could affect taxpayers more broadly, as financial resources will be redirected into these deductions.
The proposed changes could potentially reduce tax revenue for the government, as more individuals will be able to deduct these travel expenses. This might lead to higher overall taxpayer costs if the government needs to compensate for the lost revenue. On the individual level, tradespersons may see some cost relief, but they may also incur additional expenses during tax preparation to ensure compliance with the new rules.
Supporters believe this amendment is essential for providing financial relief to tradespersons who encounter significant out-of-pocket travel costs when working away from home. They argue that these deductions can make it easier for individuals to take jobs in less accessible areas, potentially addressing labor shortages in the construction industry, create more job opportunities, and stimulate local economies.
Critics argue that the financial implications of this amendment may burden the government with reduced tax revenues without clear justifications regarding its total cost impact on the national budget. Additionally, there are concerns regarding the potential for misuse of the deduction system, complicating tax administration. They call for broader solutions to support all workers facing transportation costs, as opposed to narrowly focusing on the trades sector.