Sunday, May 15, 2005

GST: Harmonization

Something stuck out in this canwest article, about the possibility of the Libs getting rid of the GST to win the election:
Mr. Marzolini said, polling consistently shows that the GST is a constant thorn in the side of the operators of small businesses, who complain about mounds of paperwork and feel affronted that they are forced to collect taxes for government.
1. Most provinces have their own sales tax, meaning that any one operator of a business has two tax collectors beating down their doors. The time and energy spent collecting and paying these taxes under the threat from either agent to take legal action to recover the money is a horrible waste of effort and resources.

If nothing else, one authority should be responsible for the collection of all the sales tax....and because of the inefficient methods used by the federal government in these areas, a provincial agent should be put in charge. One agency, one tax, one form, one tax collector.

2. Also, in many other countries (including Japan), a sales tax is pre-calculated and added to the retail price of the good, so when a consumer brings the product to the counter, he/she already knows how much they are paying. Why does Canada insist on hiding the tax until the purchase? Yes, you can bring out your calculator and try to calculate 14%, but it would just make it easier if you knew how much exactly you were paying before you bought something.

2 comments:

Anonymous said...

I wouldn't be against showing the total price if tax component was still explicit. We should never, however, endorse burying a tax in the sticker price. That only hides from the consumer what taxes he/she actually pays. People hate the GST and this is a good thing. You never heard people complaining about the manufacturers' sales tax that the GST replaced -- despite it being a 13.5% levy -- because it was buried in the price.

Shamrocks! said...

Hmmm. Good point.

Maybe something like showing both the pre-tax price and the post tax price would be a good idea.