Government proposes cutting HST to 10 per cent, with a condition
Talk about dangling the carrot.
The Province is proposing to reduce the total HST rate to 10 per cent from 12 per cent in two stages, cutting the provincial portion by one percentage point to six per cent from seven per cent on July 1, 2012, and a further one percentage point reduction would take effect on July 1, 2014.
And here’s the kicker: Proposed changes to the HST will only take effect should British Columbians vote to keep the HST.
The government will issue transition cheques to all B.C. families with children under 18, with one-time payments of $175 per child to offset increased HST costs before the first cut takes effect next year.
Low and modest income seniors will also receive the cheques, meaning some B.C. families will pay $120 a year less in tax under the 10 per cent HST when compared with the old 12 per cent PST/GST combination.
The independent panel that reviewed the HST and the PST plus GST tax systems recently estimated that families now pay an average of $350 more in sales tax under the HST than they paid with the PST plus GST system.
The independent panel also noted that while consumers are paying more, businesses are saving money. To balance the budget in 2013/14 while reducing the HST burden on families and modest income seniors, the Province will increase the general corporate income tax rate to 12 per cent from the current 10 per cent on Jan. 1, 2012, and postpone the reduction in the small business tax rate planned for April 1, 2012.
For more information about the HST, visit: www.HSTinBC.ca
British Columbians will be voting in a mail-in referendum on the HST. Ballots will be mailed in June and must be returned to Elections B.C. or a Service B.C. office by 4:30 p.m. on Friday, July 22.