NEWS RELEASE
For Immediate Release2009PREM0017-000141
July 23, 2009
Office of the Premier
Ministry of Finance
HARMONIZED SALES TAX TO BOOST INVESTMENT, JOB CREATION
VICTORIA – British Columbia intends to harmonize its provincial sales tax with the federal Goods and Services Tax effective July 1, 2010, to boost new business investment, improve productivity, enhance economic growth and create jobs, Premier Gordon Campbell and Finance Minister Colin Hansen announced today.
"This is the single biggest thing we can do to improve B.C.`s economy," said 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. Most importantly, this will create jobs and generate long-term economic growth that will in turn generate more revenue to sustain and improve crucial public services."
B.C. will have the lowest Harmonized Sales Tax (HST) in Canada, by combining the seven per cent B.C. Provincial Sales Tax (PST) with the five per cent federal Goods and Services Tax (GST), for a single sales tax rate of 12 per cent. All other provinces with an HST, and the one proposed by Ontario, have a rate of 13 per cent.
It`s estimated the HST will remove over $2 billion in costs for B.C. businesses. That includes an estimated $1.9 billion of sales tax removed from business inputs, which enhances competitiveness, increases investment and productivity and, ultimately, increases prosperity. For example, some savings would include about $880 million for the construction industry, $140 million for manufacturing, $210 million for the transportation industry, $140 million for the forestry sector, and $80 million for mining and oil and gas. In addition, B.C. businesses will also save an estimated $150 million annually in compliance costs.
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