The tax rate for small businesses in New Brunswick has dropped. As of yesterday, the tax rate is 3.5 per cent.

Finance Minister Roger Melanson says it's another step toward the government's pledge to lower the rate to 2.5 per cent by 2018.

The decrease was the second since the pledge was offered September of 2014, when the rate was 4.5 per cent. A decrease to 4 per cent took effect on New Year's Day, 2015.

Finance Minister Roger Melanson and Premier Brian Gallant.

Small businesses with capital assets up to $15 million will benefit from the tax reduction on the first $500,000 of corporate taxable income.

To ensure the appropriate tax treatment of dividend income, corresponding adjustments will be made to the dividend tax credit rate for dividends paid from income taxed at the small business rate.

Melanson says the changes will make it easier for New Brunswick small businesses to remain competitive in today’s global marketplace.