July 2, 2010, Victoria, B.C.
– The following is an HST backgrounder posted by the provincial
government
in British Columbia. Like Ontario, its new harmonized tax came into
effect on
July 1.
July 2, 2010, Victoria, B.C.
– The following is an HST backgrounder posted by the provincial government
in British Columbia. Like Ontario, its new harmonized tax came into effect on
July 1. According to the province, “introducing the HST is an essential step to
make B.C. businesses more competitive and encourage new investment.”
Currently, the PST exemption
list-based system for bona fide farmers and aquaculturists is considered
unwieldy, hard to update with respect to new technologies and places the burden
for compliance on retailers rather than the farmers and aquaculturists who
receive the benefit of the exemption. Under the current system, bona fide
farmers and aquaculturists receive a PST exemption at the time of sale only on
purchases of specifically listed items used solely for farm or aquaculture
purposes.
Under HST, some major inputs such as
certain tractors and harvesting equipment will be zero-rated, meaning that
there will be no HST payable on the purchase of the equipment. For goods and
services on which HST is payable, farmers and aquaculturists will be eligible
to claim Input Tax Credits (ITCs) provided the goods and services are purchased
for use in their business. These goods and services include many items
currently taxable under PST, such as trucks, light vans and parts, repairs to
vehicles, office furniture, computers and construction equipment. Farm inputs
that are currently exempt from the PST will also be eligible for an ITC.
Consumers will not pay any HST and
do not currently pay GST on agriculture and fishing products such as livestock,
grains and seeds, or tractors.
For technical information, visit www.cra-arc.gc.ca/harmonization.
B.C.’s resource sectors are expected
to benefit significantly from the Harmonized Sales Tax (HST) as their business
inputs and exports will no longer be taxed. In total the HST will remove about
$2 billion in costs from B.C. business, enhancing their competitiveness,
encouraging investment and resulting in more jobs.
The HST will make B.C. one of the
most competitive jurisdictions not only in Canada, but in the industrialized
world. B.C. will have the lowest harmonized tax rate in Canada. Adoption of the
HST when fully phased-in will result in B.C.’s taxes on business investment
being lower than neighbouring jurisdictions, including Alberta. This means
rural communities will be an attractive place for investment to create long-term
stable and well-paying jobs.
For more information on the
Harmonized Sales Tax, visit: www.gov.bc.ca/hst.
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