The federal and Ontario governments today signed a corporate income tax collection agreement that will see Ontario businesses benefit from one tax return, one set of rules and one point of contact.

“By moving to a single corporate tax collector, we are slashing red tape and reducing up to $100 million in annual compliance costs for Ontario businesses,” said federal finance minister Jim Flaherty.

Flaherty and Greg Sorbara, Minister of Finance of Ontario, today signed a memorandum of agreement, under which the federal government would collect and administer Ontario’s corporate income tax.

Under the agreement, businesses would make combined payments starting in 2008 and file a single return beginning in 2009 for taxation years ending after Dec. 31, 2008.

This agreement will reduce compliance costs for businesses and enable the Canada Revenue Agency (CRA) to streamline service and reduce administrative costs.

The federal government already collects corporate income tax for seven provinces and three territories.

Copies of the Memorandum of Agreement are available on the Department of Finance website at www.fin.gc.ca/toce/2006/TxMOA_e.html.