Finance Minister Bill Morneau is walking away from one of the controversial elements in his tax reform plan.

The finance department announced on Thursday it will not proceed with an earlier proposal that targeted the conversion of income into capital gains within private corporations.

“We are very pleased that the government has listened to concerns of business owners and has stepped back from this element of their new tax plan,” said Canadian Federation of Independent Business President Dan Kelly in a statement. 

The federal government has announced a wave of measures this week intended to win back support in the small business community. The Liberals committed on Monday to lowering the tax rate on small business to nine per cent in 2019. And, on Wednesday, Morneau announced a new $50,000 threshold on passive investment income.