Change is in the air, if not in your pocket.

Vancouver Olympic Flame
Where do our taxes go?

This week we heard the results of the HST referendum, with the majority of BC voters rejecting the new Harmonized Sales Tax. The HST replaced the combined 12% Federal GST (Government Sales Tax – 5%) and the PST (Provincial Sales Tax – 7%). You’d think that this would be popular. The arguments for it were to do with simpler tax accounting and business benefits. The arguments against were that the benefits were for business above individuals.

More emotionally, and probably the biggest factor influencing the result, was the way in which the tax was introduced by our Provincial Liberal Government. It came in virtually unannounced and with no debate during our last election. People were protesting against that as much as the tax itself.

The upshot of all this is that the Province now has to refund the Federal Government and unwind the tax – at an estimated cost of $3 billion. Ouch! The unwinding process is going to take up to 18 months to complete. Until then we still have good/bad old HST.

One thing that strikes me, having come from England, is that these taxes are highly visible. The HST or GST/PST is added to the price of your purchase at the till. The effect of this is that a) you see the tax you’re paying and b) you never have the exact change to pay, unless your math skills exceed mine.

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