Nearly two years after it was officially announced, the much-debated Harmonized Sales Tax (HST) will be the subject of a mail-in referendum on June 24.
Official Elections BC referendum ballots are scheduled to arrive in homes across the province this week.
The question is, “Are you in favour of extinguishing the HST (harmonized sales tax) and reinstating the PST (provincial sales tax) in conjunction with the GST (goods and services tax)?”
Over the last two years, there has been much controversy surrounding the HST, which combines the five per cent federal GST with the former seven per cent B.C. provincial sales tax into a single 12 per cent tax.
Peter Richmond, president of the 49th Parallel Grocery said the HST makes sense from an administrative point of view, although there is room for improvement.
“Business wise, there is definitely less administration involved with the HST,” he said. “We do the one HST return instead of the PST and the GST.”
“The negative side of it is those items that have the extra seven per cent on them.”
Ladysmith resident Bob Smits, treasurer of BC NDP party says he hopes everyone will vote yes to get rid of the HST.
“The HST is masquerading as a tax-lowering program and what it’s really going to do is add $350 million to small business and individuals paying taxes and give corporations about a $750-million break,” he said.
“I don’t think, when we’re as close to coming out of the recession as we are, that that’s an appropriate way for government to act. We shouldn’t be burdening everyone else with more taxes when we’re already faced with so many people out of work and just getting back to work.”
Smits also questions the wording of the referendum ballot and said he hopes voters will take the time to educate themselves about the issues and the ballot.
“The idea that you have to vote YES to get rid of something is odd,” he said. “It’s worded in such a way that makes it easy to misunderstand.”
Ladysmith Chamber of Commerce president Rob Waters said the HST has created difficulty for a number of local businesses, particularly in the restaurant and food service.
“When you talk to people in that industry, they had a double whammy with the HST and also the new liquor laws, so it created severe hardship on a lot of restaurants,” he said. “In our business here at the marina, it was a seven per cent increase on our moorage rates immediately in terms of our open and boathouse clientele, so that certainly had an impact on people’s recreational opportunities.”
On Friday, Premier Christy Clark’s two per cent tax reduction proposal became federal law. In the event that the HST is approved by a majority, the reduction would decrease the PST portion of the tax down by one per cent each year, bringing the HST down from 12 to 11 per cent in July 2012 and down to 10 per cent in 2014.
“I would have preferred to see them reduce it to eight per cent immediately, and then gradually bring it back up as the economy improves,” Waters said.
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