* Still aims for 15 pct tax rate by 2012 * Closes loopholes including tax credit for plastic surgery
By Jeffrey Hodgson
OTTAWA, March 4 (Reuters) - Canada will push ahead with plans to cut its corporate tax rate to 15 percent by 2012, but will crack down on tax evasion and scrap loopholes that include a tax credit for cosmetic surgery.
The changes, part of the 2010 federal budget introduced on Thursday, will lower the federal general corporate tax rate from 18 percent to 16.5 percent next year. The government said that by 2012, Canada will have the lowest statutory corporate income tax rate among the Group of Seven major economies.
The government will also do more to close tax loopholes, including introducing new rules for cases where employees surrender stock options back to their companies in exchange for cash or other benefits. It said this had sometimes let stock-based employment benefits escape personal and corporate taxation.
"These loopholes allow a few businesses and individuals to take advantage of hard-working Canadian who pay their fair share," Finance Minister Jim Flaherty said.
Canada will also tighten up eligibility for tax credits on medical costs, eliminating credits for cosmetic surgery unless it's required for medical or reconstructive reasons.
The government said it will strengthen the capacity of the Canadian Revenue Agency to deal with "aggressive tax planning" and fight tax evasion.
It said it will ensure that criminal code provisions that apply to serious crimes related to money laundering and terrorist financing can be invoked in tax evasion cases.
The budget also included C$3.2 billion ($3.1 billion) in personal income tax relief, which is part of the C$19 billion the government will provide this year in the second leg of its economic stimulus plan. The plan will include an enhanced "Working Income Tax Benefit," along with higher child benefits for parents and lower taxes for some seniors. ($1=$1.03 Canadian) (Editing by Janet Guttsman)