VICTORIA — B.C. has made plans to harmonize its provincial sales tax with the federal GST next Canada Day.
The province hopes that by harmonizing the two taxes on July 1, 2010, the region will see a boost to new business investment, improved productivity, enhanced economic growth and job creation.
“This is the single biggest thing we can do to improve B.C.’s economy,” states Premier Gordon Campbell. “This is an essential step to make our businesses more competitive, encourage billions of dollars in new investment, lower costs on productivity and reduce administrative costs to B.C. taxpayers and businesses.”
By combining the seven percent B.C. Provincial Sales Tax (PST) with the five percent federal Goods and Services Tax (GST), a single sales tax rate of 12 percent will be created. All other provinces with an HST, and the one proposed by Ontario, have a rate of 13 percent.
Similar to PST exemptions, the B.C. HST will provide consumers with point-of-sale rebates on a number of products including gas and diesel, which means consumers do not have to pay the provincial portion of the HST at the pump.
The federal government will provide B.C. with $1.6 billion in transitional funding. The full cost of administration will be handled by the federal government, similar to other provinces with an HST.
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