All personal income tax amounts will be adjusted by 2.2% in 2006, the federal government announced today.

Indexation is designed to ensure that inflation does not cause people to pay more income tax.

Restoration of full indexation of the personal income tax system was announced in the 2000 federal budget and took effect that same year.

Since that time, personal income tax amounts have been indexed to inflation every year using Consumer Price Index data, as reported by Statistics Canada.

Changes to tax bracket thresholds and non-refundable credits will take effect as of Jan. 1, 2006.

Adjustments to the Canada Child Tax Benefit (including the National Child Benefit supplement and the Child Disability Benefit) and the goods and services tax credit will take effect as of July 1, 2006, to coincide with the beginning of the “program year” for these benefits.