Points to consider in regards to GST cut

[crackerjack]

This site brings up a few good points about the GST rate cut.. Now I think I would oppose it!

http://www.deloitte.com/dtt/newsletter/0,1012,cid%253D177728,00.html#rate

It's an extra cost to businesses.. if the feds want to reduce the GST.. they should do it in a one big shot as opposed to 1% every once in a while...

I think it's irresponsible by Harper to do this. Wouldn't businesses raise the prices of their goods and services due to the extra expense that they incur to change their systems to reflect the new rate? So there is no real savings to be had except if one buys a new home or car.

[Bullseye]

As an accountant who does the books for a handful of different businesses, I can tell you that changing the GST rate is actually very easy, and takes little time.

[WHO]

Try explaining that to CT, who've had their "temporary tax" lines on their receipts since the last drop. Not so "temporary" anymore...

[brunes]

Try explaining that to CT, who've had their "temporary tax" lines on their receipts since the last drop. Not so "temporary" anymore...

That is just so that if they do a refund from that year the system refund the correct tax amount.

And to Bullseye - I don't think the majority of the work would rest on the accounts, it would rest on the IT department. Think of a corporation the size of CT having to change the GST rate on every register. The newer systems can possibly be remote updated, but I imagine the vast majority have to be re-programmed by hand. Then you have the changes to the web sites. On top of that you have the QA testing cycle, which is probably twice the work of the actual change. Then on top of that you have the back-end system changes, and finally the accounting changes you refer to.

Overall from my POV I think it would be much more expensive to change the GST rate than for example changing the corporate tax rate, simply because of the number of affected systems.

[konfusion666]

Overall from my POV I think it would be much more expensive to change the GST rate than for example changing the corporate tax rate, simply because of the number of affected systems.

but it's a one shot change.

we'll probably stay at 5% GST for a long time. so spend a bit of money right now fixing your systems and no further salestax-related changes required for the foreseeable future.

[harlequin]

As an accountant who does the books for a handful of different businesses, I can tell you that changing the GST rate is actually very easy, and takes little time.

More complex tax laws or frequent tax changes = more jobs for accountants

[stewpy]

The GST debate makes me laugh. Mulroney introduced it with the Liberals decrying its unfairness, promising to eliminate it in their Red Book. Fast forward 15 years and the Conservatives promise to reduce it, and the Liberals are decrying the move as unfair!

No comment on the tax itself, but I just find the above amusing.

[brunes]

The GST debate makes me laugh. Mulroney introduced it with the Liberals decrying its unfairness, promising to eliminate it in their Red Book. Fast forward 15 years and the Conservatives promise to reduce it, and the Liberals are decrying the move as unfair!

No comment on the tax itself, but I just find the above amusing.

Both the main parties are full of it like this. Liberals talk about taxing income trusts, Conservatives promise not to, first major thing they do after theyre elected, they tax them to death. Now liberals want to remove the tax and conservatives want to keep it.

It's always the same bull s h|t. Voters just never hold them to account.

[stewpy]

Both the main parties are full of it like this. Liberals talk about taxing income trusts, Conservatives promise not to, first major thing they do after theyre elected, they tax them to death. Now liberals want to remove the tax and conservatives want to keep it.

It's always the same bull s h|t. Voters just never hold them to account.

LOL so true.

In regards to GST, I think the biggest change I would like to see is harmanization with PST. Way less admin to deal with...

[AllWheelDrift]

LOL so true.

In regards to GST, I think the biggest change I would like to see is harmanization with PST. Way less admin to deal with...
But some things are only subject to one tax. For example, PST but no GST on private sale of a used car. It would suck to always have to pay both taxes in situations where previously only one applied.

[brunes]

But some things are only subject to one tax. For example, PST but no GST on private sale of a used car. It would suck to always have to pay both taxes in situations where previously only one applied.

It will end up working out overall because while you will be taxedon more things,your rate will go down (due to efficiencies in administration etc. from only collecting one tax)

For example here, our PST used to be 11% and the GST 7%. When HST was rolled out, the rate was 15%, not 18%. So on day to day purchases you save 3% in sales tax. Of course, we now pay sales tax on some things that used to be PST exempt, like kids clothing and school supplies and heating oil. I remember when the HST was rolled out, the local papers did a huge breakdown of the average families expenses - it ends up pretty much a wash.

[McGregor]

But some things are only subject to one tax. For example, PST but no GST on private sale of a used car. It would suck to always have to pay both taxes in situations where previously only one applied.

Not a very good example to illustrate your point! Under a real harmonization, you would stop paying PST on private sale of a used car! (unless Province creates a special rule and continues to apply PST to private sales).

[dark169]

I dont see how its any level of governments fault that poor programing prevents a change in the tax at the till or in accounting software.

Having done the tax change from 7-6% you would think they know how to do it now and it should be easy. :lol:

Its a tax cut, any tax cut is a good tax cut. It may not be the best one but its still a tax cut.

[AllWheelDrift]

Not a very good example to illustrate your point! Under a real harmonization, you would stop paying PST on private sale of a used car! (unless Province creates a special rule and continues to apply PST to private sales).
I stand corrected. I guess bicycles would be the correct example. They are currently free from PST in BC, but I believe they are subject to GST.