HST: Should It Be The Hated Tax?
The Fort St John & District Chamber of Commerce invites you to join us
on October 14th – 7 – 9 pm at the Pomeroy Hotel
for a Free Information Seminar
Everyone welcome to attend!
On July 23, 2009, Premier Gordon Campbell and his Finance Minister Colin Hansen announced that B.C. would harmonize the Provincial Sales Tax (PST) with the Goods and Services Tax (GST) effective July 1, 2010. The new single sales tax rate for the B.C. Harmonized Sales Tax (HST) will be 12%.
The Business Council of British Columbia reacted quickly to the news and issued a press release in favour of the change adding “A harmonized sales tax regime will stimulate investment, bolster BC’s competitive position, and raise productivity –- thus leading, over time, to higher real wages and incomes.”
Other, less positive reactions to the news has been well documented in the news media and on-line. The average British Columbian is angry, as the new HST results in a highly visible shift of taxation from businesses to individuals. This anger is understandable as household budgets are increasingly being squeezed in these recessionary times.
Lower Production Costs Could Lead to Lower Prices
It’s not all bad news for individuals as the HST should, over time, result in lower prices. Currently, PST is applied at every step in the creation of a product. The multiple PST charges are included in the purchase price that consumers pay in the store even though they don’t see the PST in the price that they pay. Of course, PST can also apply on the final purchase price. Under the new system, the final consumer of the product is ultimately responsible for paying the HST. Businesses will have lower production costs which, in theory, should allow for a reduction in the purchase price to consumers. Time will tell whether or not businesses pass on the savings to their customers.
Reduced Compliance Costs
Compliance and paperwork costs for thousands of B.C. businesses will decline when B.C. integrates its PST with the GST. Under the present system of separate federal and provincial sales taxes, business are forced to deal with two sets of tax rules, administrative authorities and compliance requirements. Tax compliance and other regulatory costs will be lower under the new HST system, savings that will especially be beneficial to small business owners.
MLA Pat Pimm will be guest speaker at a seminar as well as Western Canada Tax Practice that has been through the harmonization process in the Maritimes and are prepared to come and speak on the harmonization process in Ft. St. John.
Some of the topics that will be discussed but not limited to are as follows:
- Key issue areas that will make BC’s HST different from the GST legislation;
- Grandfathering Provisions that may be expected;
- Impact on Transitional Transactions – for sales & leases of tangible personal property ("TPP") along with sales and leases of Capital Real Property;
- Supplies of services that straddle the transitional period (which is the period of time between the announcement date and the date of implementation);
- Application of the tax – what will the "base" be?;
- Place of Supply rules – What does this mean?;
- Impact on the Energy Sector;
- Impact on the Forestry Sector;
- Impact on Agribusiness;
- Impact for Public Sector Bodies – school boards, colleges, municipalities, charities
- Impact on Credit Unions, Insurance Companies, and other Financial Institutions
- Impact for First Nations
- New housing rebates
- Point of sale "rebates"
Thank you to the Pomeroy Hotel for the donation of the venue, without partners like you we could not have made this information seminar happen.