Summary
HST, harmonized sales tax, is a tax that merges both the GST and PST together to create a 12% on goods and services. The government says that it will help create extra costs for businesses and consumers, but many people strongly oppose it. This new tax will not only apply to the goods and services that once applied to GST and PST. For example frozen pizza in a grocery shop does not subject to PST only GST but ion July 1, 2010 it will be subject to HST. Because of this, many people believe that it will make a difference in their day-to-day spending.
Connections
In Accounting 11, we learned that GST and PST are deal differently. PST is a sales tax charged to customers and put into an account called the PST Payable. It then is remit to the provincial government periodically. The GST on the other hand, is similar to the PST but it remit to the federal government. GST affects the GST Recoverable and the GST Payable. As shown above the two taxes are very troublesome having to take care of so many accounts, but in July 1 2010, there will be no longer GST and PST but HST. Wouldn’t taking care of one tax be less time efficient than two?
Reflection
Honestly, I can see the reason why nine out of ten people dislike this tax. Although the government says that, this tax will help the economy to become more competitive but I do not see how it will help. Many items are PST free but when the HST is out people would have to pay the whole 12%. In my perspective, this tax will affect many restaurant businesses because it use to be 7% on the bill but soon it will be 12%, but also keeping in mind that there should be a 10% tip. All this will have a great impact on the business because many consumers may not want to pay so many other fees for one simply meal.
Comment
ReplyDeleteAn article in the Vancouver Sun stated that this new tax will cut cost for businesses and save them a burden of paperwork, but will add expense to Canadians. PST (7%) and GST (5%) will be combined to form a new tax HST (12%) on goods and services to consumers. In my opinion, I believe the government is playing with the figures. A few years ago, Stephen Harper, the federal government had reduced GST from 7% to 5% to reduce consumer’s spending on tax, so it would be more effective in consumption. Now, Premier Campbell had agreed on HST without listening to Canadians’ response. Even though this mainly tax final consumption and not businesses, I believe the government should not levy this tax before the recovery.
Many individuals oppose to the idea of having HST as a combined tax of GST and PST, and I don't disagree with them. In fact I admit that I am among one of those individuals that find HST to be a nuisance because I find more disadvantages of HST then advantages of it. For example, like you have said earlier when paying for food or eating in a restaurant, PST was excluded, but now we will have to pay that extra 7% including the 5% of PST, which makes it a total of 12%. Is this really going to help improve the economy, help the recession, and reduce numerous unemployed people, because I personally don’t think it would.
ReplyDeleteI find the HST will be not only a nuisance to the people but also that it will slow down our Canadian economy because the GST would be added to all products on top of the PST. When all costs of the goods and services increase because of the harmonized sales tax, I believe people would dine out less and make more spending cuts on even necessities because of the recession. This would be a chain reaction for all businesses because their revenue would decrease through time and possibly have a net loss rather than a net income. That is why I do not agree with the government's plan on combining the two taxes and I agree with you seeing that this plan will not definitely help the Canadian economy.
ReplyDeleteHST is a tax that combines with GST and PST, which reduce much paperwork of GST and PST. Now, people just need to record as one tax. Even though is convenience for many businesses, but it strong affects a person’s daily spending. While using taxes of GST and PST separately, people just need to pay 5% in restaurant. After the HST actually operates, the tax on restaurant meals will jump from 5% to 12%. Everyone is experiencing recession, should the government help people reduce taxes, how come they do the opposite? Many middle class people have drop in to lower class, people cannot afford anymore with pay 12% of tax even when they are spending money on their basic needs, food. If the HST really operates, I can image that there is less people eating in restaurant, instead of that most families will start cooking at home to reduce basic daily cost. Do people still willing to spend 7% more of eating in restaurant?
ReplyDelete