What is HST in British Columbia?
HST stands for Harmonized Sales Tax. It is a new taxation law in the province of British Columbia in Canada. It took effect on July 1, 2010 and it is set to “merge” or harmonize the previous PST or provincial sales tax and GST or goods and services tax. It is created to stimulate the province’s economy and is said to be helpful for businesses as it eliminated the extra cost of PST or consumer taxes.
Through the Consumption Tax Rebate and Transition Act, the Harmonized Sales Tax was put into law in British Columbia. With the elimination of PST and harmonizing it with GST, HST now stands at 12%, which is said to be the lowest in all of Canada. And because of HST’s implementation, businesses are projected to benefit making British Columbia even more competitive.
Billions of taxes will be removed from various industries because of HST, including the manufacturing, construction, forestry, transportation, and mining industries. Because of the tax cuts, these particular industries are projected to grow bigger and generate more jobs for the people across British Columbia. And based on studies, the introduction of HST will lower the prices of goods, which is very beneficial to consumers.
The HST scheme also involves new tax credits and exemptions that will benefit low income families of the province. Each of these families will be able to receive a 230 dollar credit for each member. Many other families will also benefit from this tax scheme as basic grocery items and home mortgages are not part of the scheme. Even the electricity and natural gas used in homes will also not be taxed through the HST scheme.
Along with HST, various other tax deductions will be implemented across British Columbia to aid more families and smaller businesses. British Columbians will be able to avail of tax deferral programs during hardships and when a family has children under the age of 18. Individual tax credits were also increased to 17% resulting to less income tax payments.
Not all is happy with the implementation of HST though. Consumers have complained that prices have actually increased because of HST. But supporters of the HST scheme would like to educate the public that the benefits of this scheme are long-term and will apply across various business industries.