The HST Referendum Results
The HST referendum results have been announced. See the breakdown and response from the Government.
There are two different ways the HST lowers costs for business: by removing sales tax from business inputs and by reducing administrative costs.
Removing Sales Tax
Under the PST, B.C. businesses paid sales tax on much of the equipment, energy and other goods and services used in their business – business inputs. PST was paid at every step in the creation, production and distribution of a product and built into the price of goods or services sold by the business.
Under the HST, most businesses can recover the sales tax they pay. The Independent Panel estimates that HST saves B.C. businesses $730 million in sales taxes annually even after passing through 90 per cent of savings to consumers. This reduces both operating and capital investment costs, making it cheaper to run their businesses and to make new investments to expand their operations.
The HST removes an estimated $1.9 billion of sales tax from business inputs – most of which were passed along to the final consumer. Overall businesses will pay close to $730 million less in taxes under the HST
Reducing Administrative Costs
Costs are also lowered for B.C. businesses by reducing their administrative and tax compliance burdens. Instead of the duplication that existed with two taxes, the GST and the PST – two sets of rules, forms, audits, etc. – the HST has only one set of administrative rules.
Most B.C. businesses will benefit from reduced costs and improved competitiveness with the HST. It saves B.C. businesses an estimated $150 million annually by reducing administration costs associated with the duplication of collecting and paying two taxes under the previous PST+GST system.
Learn more About HTC to PST
The PST will be reinstated effective April 1, 2013.
Will the PST be re-implemented at 7%?
British Columbia’s provincial sales tax (PST) will be re-implemented effective April 1, 2013 at a general tax rate of seven per cent
Will all permanent PST exemptions return?
The PST will apply to the same goods and services that were subject to PST prior to the implementation of the HST. All permanent PST exemptions will be re-implemented with the new PST.