I've heard that native people don't pay any taxes.
Taxes are never easy to understand, whether for native or non-native.
In the last decade, an increasing number of cases have been before the courts in an attempt to clarify specific exemptions to which native people are entitled by treaty or law. Non-status band members are entitled to a tax exemption for any interest which they hold in reserve or surrounding lands in exactly the same manner as status Indians. This would include exemption from tax in respect of any possessory interest in reserve land, for example, a lease. Metis and Innuit are not entitled to any of the favourable tax exemption treatment set out in the Indian Act. Indians are exempt from tax on income earned on the reserve but, at present, pay all other taxes including provincial gas taxes, cigarette and alcohol taxes and various sales taxes if they are not purchased and used on the reserve.