Carrot Stick of HST Rate Cut by BC Government

On May 25th, BC Finance Minister once again put a carrot stick in front of BC Residents of HST rate cut, to save the HST from HST opponents.

Yes, HST is costing consumers more money as different surveys have proved it. The positive effects of HST have not materialized yet. We have not seen a spike in employment but we have certainly experienced a spike in expense.

But now the new proposal of 10% tax rate from 2014 sounds really good. Why they could not make this rate effective from 2012 is beyond my understanding.

From consumer points of view, this is an overall lowest tax rate in Canada, when it will come in effect. From business point of view, they will still recover the 10% HST, which will include the 5% PST portion. So, they are better off too.

What I like about HST most now, is the tax rate is lower and also one tax rate simplifies the tax management for the Business owners.

HST in BC now looks very attractive. HST opponents, who are still opposing the HST, are overlooking the real impact of this consumer tax on BC consumers and businesses.

The deficit of reduced HST rate cut is being covered by an increase in corporate tax rate, which is pretty logical and deferred reduction of small business tax rate.

This is needed to balance the BC budget.

If HST is rejected by the BC voters in the referendum, it will cost $2.3 billion to BC government in 3 years. I am not sure if BC voters are ready to take this burden, since BC is already facing huge cuts in many social and cultural programs.