Ontario Tax Harmonization

[northern_wind5]

So I'm sure a lot of people have heard about Mr. McGuinty deciding that the GST and PST in Ontario need to be harmonized. So this means everything will have both taxes instead of just some and it will just look like 13% total instead of the GST at 5 and PST at 8 on your bill

Comments

[harry_beast]

Harmonizing the sales tax will result in both immediate and long term benefits to the province. Ontario's current economic difficulties are all the more reason to get on with this long overdue reform.

[manmademonster]

"Harmonizing the sales tax will result in both immediate and long term benefits to the province."

Please elaborate.

[harry_beast]

It makes businesses in Ontario more competitive, resulting in more jobs and investment in the province.

http://www.vancouversun.com/news/Case+harmonized+sales+more+compelling+than+ever/1443749/story.html
http://www.fraserinstitute.org/Commerce.web/product_files/GSTHarmonization.pdf

[sun_tzu]

So they say. However other than saving some accounting costs for businesses, no one has explained what these benefits are and as such I'm not convinced. So please, elaborate if you are able.

[harry_beast]

At the moment, Ontario manufacturers pay taxes on their inputs, which raises their costs, so that they are less competitive than imports. This reform will level the playing field for made in Ontario products.

According to http://www.cbc.ca/money/story/2009/03/27/f-tax-faq.html
- Businesses could save up to $3 billion a year
- The Ontario Chamber of Commerce estimates a savings of $1.6 billion for businesses, while consumers will pay $905 million more
- The Canadian Federation of Independent Businesses says harmonization will save business $100 million a year in reduced red tape.
- Budget documents estimate a further $500 million in reduced costs of administration

According to http://taxharmonization.on.ca/files/HST_Report.pdf
- Under the current system, municipalities pay provincial taxes on their inputs also. The reform will reduce their costs as well.