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Saskatchewan business wants harmonized sales tax

Call comes despite B.C., Ontario political fallout over HST


 

A sweeping report on how Saskatchewan should reform its tax system, delivered today by business groups led by the Saskatchewan Chamber of Commerce, calls for the province’s sales tax to be harmonized with the
federal Goods and Service Tax, at a combined rate of 12 per cent by 2017. It’s just one proposal in a much larger blueprint, but remarkable as it comes after governments in British Columbia and Ontario continue to see their popularity battered after implementing GST harmonization. The fact that the Saskatchewan report raises the idea again is testimony to the powerful logic behind governments relying on consumption taxes rather than growth-slowing taxation of income and investment. That doesn’t matter much, though, in the world of politics—Saskatchewan Finance Ken Krawetz said all the report’s recommendation would be considered, “other than the recommendations on tax harmonization.”

Star Phoenix


 
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Saskatchewan business wants harmonized sales tax

  1. Any wonder why? In BC for most businesses any capital and business purchase is 7% cheaper. Buy a truck or office supplies? 7% less than it was in June.

  2. The recommendations need to be taken as a whole and focus on ensuring that Saskatchewan continues to grow and compete in the future. But we are getting the typical blowback from the left – listening to people on the CBC call in line that there should be more taxes on higher income people – makes me sick!!! I no longer work as much as I could because my higher income just gets taxed away. I mentioned this to a friend, who with great gusto told me that "I should be happy that my income is going to support less fortunate people" – I told her that I will decide what makes me happy not some left leaning social do gooder and by claiming that I'm helping the 'less fortunate' implies that I somehow got 'lucky' in my life – sorry, but I worked hard to get everything in my life – it wasn't like I bought a lottery ticket that won!!!!

  3. I find it hard to believe that any person in their right mind would vote for a harmonized tax. Having travelled for over 50 years I have seen many places where taxes were high and without a doubt these area's went down the tube. Whatever happened to the theory that if you keep prices down you encourage more people to come into your place of business and shop. It is called work on a volume not a high shareholders percentage.

    • A harmonized sales tax lets businesses charge tax on their sales but DEDUCT tax on their purchases. It helps to KEEP COSTS down through the supply chain, and encourages businesses to avoid black market sales since the only cost to them is on the accounting side.

      It (the federal GST, anyways) replaced the insanely self-damaging Manufacterer's Sales Tax that burned each sale through the domestic supply chain, making domestic producers less competitive than foreign producers. It is an incredible blessing that such a damaging taxation scheme was done away with.

      Yes, no consumption tax (and non-stifling income and investment taxes) is (are) a better way to go about things. But look around, and you will have a hard time finding a province that is taking any meaningful steps to keep spending out of the welfare-state zone. So that money's gotta come from somewhere.

  4. By itself, the benefits of a harmonized sales tax for business are obvious. By itself, the benefits of taxing non-essential purchases rather than income are obvious.

    In fact, if not for the concern that politicians will simply take the new revenue and do nothing to lower income taxes, this would be a no brainer altogether.

    However, it is that last point which throws a wrench in the works. If the provinces are going to introduce this and through doing so introduce new revenue streams on products previously untaxed, then there needs to be a reduction of income taxes to balance it out.

    Ontario and BC have done this to some degree, but it's fairly obvious that those getting the breaks are not those paying into the new revenue streams.

    The truth is though we won't really know the total effect of all this until a few years from now.

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