What is the HST?

Posted September 30th, 2009 by arjunna

July 23, 2009 the B.C. government announced, after pressure from the federal government, that it will be following in the footsteps of other provinces such as Ontario and New Brunswick with the adoption of

the Harmonized Sales Tax.

 

The Harmonized Sales Tax (HST) is a value-added sales tax that will combine the 7% provincial sales tax (PST) with the 5% federal Goods and Services Tax (GST) resulting in a Harmonized Sales Tax (HST) of 12 %. This tax will apply to the same goods and services as the GST with some exceptions.

   

The Issues

 

The concept behind this new tax that the government is promoting is that it will reduce the tax burden on businesses, which currently pays almost half of the PST. In short the costs that are being incurred by businesses in the current system will most likely be transferred onto consumers.   

 

  • Most items that were previously PST exempt will now be taxed including restaurant meals, school supplies, taxi fares, new homes over $400,000, home renovations, haircuts, funeral services and airline tickets, just to name a few.
     

  • Businesses in the Food and Beverage industry could be hit hard with an estimated $750 million in lost sales per year, or $50,000 per restaurant as people cannot afford to eat out as often.
     

  • The tourism industry is expected to suffer with increased taxes on airline tickets and many tourism services.
     

  • The real estate market could be negatively impacted as potential home buyers face new taxes.
     
  • The government has not released any detailed data to support the claim that the HST will be good for BC's economy.
     

  • There is no evidence that the savings businesses will receive under the HST will actually outweigh the loss of revenue as consumers can't afford to spend more.  Some businesses will gain and some will suffer.  It has not been made clear which is which.  
  • There was no consultation with organizations and businesses that will be heavily impacted.  This means that the concerns of those who will be affected may not have been understood or even known and were likely not taken into consideration. 
  • Small businesses in BC fear that this new tax will make it even harder to make ends meet in an economy in which they are already struggling to survive.

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      What Next?

       

      Many are speculating a huge impact on many key industries in B.C. The fact that B.C. is not the first to adopt this tax allows businesses, organizations and residents to look at affects the HST had on the provinces that previously changed to a harmonized tax system. Canadians are fortunate to live in a country where there is the freedom to voice your opinion. Many Canadians are taking advantage of this right by speaking out about this tax. With the HST coming into effect in June of 2010, British Columbians have to the opportunity to look at the possible effects of this increase in tax. Learn what you can about the HST to see how it will affect you, your family or your business.

       

       

      Questions to Ask Yourself

       

      Residents across British Columbia are asking themselves key questions. Have you put serious thought into how you could be impacted by this new tax? Perhaps it is time that you joined the important discussions that are taking place in every level of every community in the province.   

       

       

      How will the HST impact me and my family? What will we be able to afford? what will we need to be cut out.

       

      Are you confident that the savings that businesses receive will actually be passed onto me, the consumer? 

       

      Do I understand how the HST really works?

       

      How do I feel about the fact that there was no consultation prior to the B.C. Governments decision?

      Comments

      Hey...this is a wonderful

      On December 20th, 2010 dabora says:

      Hey...this is a wonderful website buddy and an informative post!!! i am new here and i found this site very interesting and informative ,, you are a professional blogger i think i have a great interest in such things...thank you for the post buddy and keep on posting nice stuff like this :) i am a student.
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