July 3, 2009 / 5:19 PM / 10 years ago

UPDATE 1-Lower taxes to lure firms to Canada-Flaherty

* Others expected to follow move by Tim Hortons

* Sees combined federal, provincial rate of 25 pct (Adds comment, details)

OTTAWA, July 3 (Reuters) - Other companies are likely to follow Tim Hortons Inc THI.TO in moving their corporate structures to Canada to take advantage of a falling corporate tax rate, Finance Minister Jim Flaherty said on Friday.

The coffee shop chain said last month it applied with U.S. regulators to return to its Canadian corporate roots through a reorganization to benefit from lower taxes.

Flaherty told reporters on a conference call from Chile, that he hoped the provinces would follow in the footsteps of the Conservative federal government and commit to reducing their tax rates to 10 percent by 2012.

The federal government has pledged to reduce its corporate tax rate to 15 percent by that year, for a combined rate of 25 percent.

“I’m optimistic that we’re going to get to that 25 percent (corporate) tax rate, federal and provincial, by 2013 or so,” he said.

“That gives us an opportunity to brand Canada at a corporate tax rate of 25 percent globally. So that’s the goal.”

Flaherty and other globe-trotting Canadian ministers have been touting the country as an investment hotspot, highlighting its emerging tax advantage as well as its banking system, which has withstood the global financial crisis without bailouts or bankruptcies. (Reporting by Louise Egan and Randall Palmer; Writing by Jeffrey Hodgson; editing by Rob Wilson)

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