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Governor General's salary to be taxed, but it won't cost him a dime

How do you pay income tax without actually losing any salary to the Canada Revenue Agency?

Well, it helps if you’re the Governor General of Canada.

Thursday’s budget announced that Gov. Gen. David Johnston’s salary, traditionally exempt from income tax, will be taxable as of next year.

But there’s a big catch.

His annual salary of $139,939 will be increased to ensure that he still pockets that full amount after income taxes are deducted.

Which sounds as if Canadian taxpayers are picking up the tab for his taxes.

“It’s a unique situation,” said a sheepish Finance Department official.

The budget said the measure follows similar recent changes in Australia and New Zealand, which made their vice-regals subject to income taxes.