Taxable or Non-Taxable? People don’t really know what’s exactly going on with the Harmonized Sales Tax. Here is a table to see what is taxable.

Source: “Harmonized Sales Tax in Canada British Columbia Edition” prepared by BC’s CGAs.

Please read it carefully. If you still have second thoughts regarding HST, please contact Acton Accounting and Bookkeeping.

On April 6^th a massive campaign to take down the Harmonized Sales Tax  (HST) in British Colombia  was headed by former premier Bill Vander Zalm called “Fight HST” . This campaign exists to fight against Premier Gordon Campbell in order to impose a public referendum on the HST. If Vander Zalm and his army of volunteers thrive, this movement will enter in history as the citizen’s first successful initiative to force BC to hold a referendum.

We all know this won’t be easy: the volunteers have to collect 10% of registered voters in each of the 85 provincial ridings for the petition within the next 90 days. In other words, they need 300,000 signatures to push back the tax reform.

What exactly is wrong with HST?

It is obvious that the reform will have a significant impact on consumers who will pay much more taxes on products and services (which are usually free from PST).

For the same reason, HST will hurt small businesses. Businesses who, in the future, sell services outside the province within Canada will become tax collectors for the consumers’ region. This can either boost the national economy or slow it down; Business relationships between 2 provinces will have to be well-balanced if we don’t want the provinces to depend upon each other and if we want to boost Canada’s economy.

Pro-HST

The original plan was to harmonize taxes in order to attract more investments within Canada and to be able to create a significant number of jobs in the country.

According to the BC government, there are some benefits for customers:

-  Some products will stay exempt from PST, such as gasoline, children clothing, books, diapers, and other products which are currently exempt from GST will stay out the reform.

- New home buyers purchasing a house worth more than $525,000 will receive a rebate estimated at $26,000. However, the purchase of used homes will be HST exempt.

- Families with an income of less than $25,000 will receive a special HST credit.

- HST is not supposed   to improve consumers’ costs for electricity or natural gas.

Rural industries will realize that it is important to save. This allows them to invest back in local job opportunities and encourage investments in BC.

Finally, if you are a Canadian taxpayer you will be saving money thanks to the HST, because of the reduced administrative costs incurred by the PST.

Overall, we’re not here to tell you what you need to think about HST. You already know from daily newspapers that the HST is a major concern these days. If you don’t know what to think yet, you can check out the opposing sides’ websites http://fighthst.com/ and http://www.gov.bc.ca/hst/.

In my opinion, the HST is more a question of politics rather than economics.

HST by Aranda Adams

Remember: the RRSP deadline for tax year 2009 is coming soon! On march 1st 2010, it will be too late to contribute to your RRSP, even if you’re still under the contribution limit of $21.000.

But what about the tax refund on your contributions? Well, you can calculate it yourself doing the maths! Your marginal tax rate times your total contribution for the year, and that’s it!

If you don’t have any clue at all, feel free to contact us.

Better late than never…