Backgrounders
BC Harmonized Sales Tax (HST)
Recent Media Coverage
- Harmonized tax has competitive edge
BIV - August 18-24, 2009
- HST good for business, consumers: Chamber
Walter Anderson, President, Greater Nanaimo Chamber of Commerce - Harbour City Star - August 14, 2009
- Harmonized tax badly needed and likely revenue-neutral
Vancouver Sun - August 11, 2009
July 23, 2009 saw the provincial government announce its intention to harmonize the Provincial Sales Tax with the Federal GST effective July 1, 2010.
The Chamber welcomed this announcement as the fulfillment of a policy recommendation the Chamber has been advocating since 2002 (in its current form).
This announcement will result in B.C. having the lowest Harmonized Sales Tax (HST) in Canada, by combining the seven per cent B.C. Provincial Sales Tax (PST) with the five per cent federal Goods and Services Tax (GST), for a single sales tax rate of 12 per cent. All other provinces with an HST, and the one proposed by Ontario, have a rate of 13 per cent.
This will have a profound impact on the economy. The BC Progress Board has stated, “Harmonizing the PST with the federal GST would do more to stimulate investment in the province than the complete abolition of the corporate income tax.”
Specifically, this measure will provide the following direct benefits:
- Business will save on administration costs by being required to collect and remit 1 tax, not 2
- This represents an estimated saving $150 million annually, more importantly it gives small business owners the most important commodity – time.
- Business will see the effective elimination of sales tax from their business operations
- Removal of $2 billion in hidden PST from the supply chain
- $30 million annual saving to BC Government as Federal Government take responsibility as sole collector of single sales tax
This will lead to a significantly increased level of investment in:
- New equipment & machinery
- More staff (in addition to retaining present staff levels during challenging economic times)
- Lower prices for consumers
This is not an issue of direct cost for the business community. In fact this initiative removes the issues of sales tax from all business (with the exception of business save that are seeking Input Tax Credits (ITC’s) for goods and services that are themselves exempt from GST).
Many commentators have talked about the possibility of businesses going broke based on the imposition of HST. It should be made clear: business will face no increase in costs from HST. The concern for business is with regards to their customers ability, or appetite, to absorb an increase in the price charged for goods and services provided to the consuming public.
The material provided here is intended to provide a forum for information on this critical public policy issue. Chamber Members can find more information about this issue in the Members Only section.
HST Material |
HST vital to sustaining economic prosperity in BC - Statement from province's business associations |
CD Howe Institute – Lessons in Harmonization - What Experience in the Atlantic Provinces Shows About the Benefits of a Harmonized Sales Tax (PDF) |
Contact:
Jon Garson
T 604.638.8113
E jgarson@bcchamber.org
