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HST Looming in Ontario & B.C.

Posted 2010.05.31 13.19 in Pointless Blather, Work

With the HST (known as VAT in other parts of the world) only a month away now for Ontario and B.C., it’s still mighty hard to find crucial information. It’s out there, but they seem to be going to great lengths to hide it. Reminds me of the planning notice that Arthur Dent found, that let him know about his house’s impending demolishment. On display in the bottom of a locked filing cabinet, in a disused lavatory in the cellar, where the lights didn’t work and the stairs were broken, and a sign outside the door saying “Beware of the Leopard.”

So the information is out there, and if you happen to run a business or just need to know about the tax laws, then it’s up to you to check the government’s websites on a regular basis and dig and scrounge for information – bearing in mind that it might be wrong, outdated, or superceded next week. Eg. the Ontario government set up a toll-free number you could call to get information on the new rules. I called the number and asked some very specific questions. The answers I was given sounded authoritative and informative. Some of them were wrong, or contradicted information provided by other venues.

By and large, I don’t expect that prices of most goods or services will go up much, and I don’t expect them to go down at all. There are certain areas though where the general public can expect to receive a good solid boot to the head. For instance, the price of postage had a fairly stiff increase in January – from 54 cents to 57 cents for a normal first-class letter within Canada. This will see another jump due to the tax increase, from 5% to 8%. So a 57 cent stamp (which currently costs 60 cents) now, is going to cost 64 cents in July. Factoring the increase in postage and the increase in taxes, this means an overall price hike of  7 cents, within 6 months. Not a lot of money for a single stamp, but what if you use a hundred a month? That’s a 7 dollar increase.

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HST Lies & Misinformation

Posted 2009.12.16 12.43 in Pointless Blather, Work

So far, it looks like Ontario is still going ahead with this HST nonsense. Mostly, I don’t really care one way or another – it’s a zero-sum change for me. Being an entrepreneur and working in small business, whether the GST is 5% or 13% is largely irrelevant due to the way the tax is managed with the ITCs balancing the taxes collected.

One thing that I really dislike though, is when governments lie and mislead in order to push their agenda through.

Will the move from GST (5%) + PST (8%) to HST (13%) cost the average consumer more money? No. The 13% rate won’t apply to stuff that’s currently PST exempt.

It’ll be a huge pain in the ass for programmers and accountants etc. to get this set up for retailers’ POS systems, but generally speaking the actual tax rate isn’t going to change.

They don’t need to add lies or misinformation to sugar-coat it. What am I talking about? Specifically, this paragraph I keep coming across in the Ontario Ministry of Revenue‘s website:

Right now, provincial sales tax is paid by most businesses at each step in the creation of a consumer product. In other words, though you may not realize it, the PST is charged multiple times during the production of a product before that product reaches the store. So it can be a tax on a tax on a tax, all hidden in the cost of a product until it gets to the consumer. Under the HST, most taxes paid on business inputs will be refunded to the business — savings that can be reinvested and passed on to consumers.

I’ve been working with small businesses for over two decades. I can tell you that the PST is not charged multiple times during the production of a product. This is simply a flat-out lie.

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