With less than 48 hours to go before the HST takes effect in B.C., the Fraser Institute has released a report that aims to debunk myths about the new tax.
The report, Countering the Myths Surrounding B.C.’s Harmonized Sales Tax, outlines for businesses how the HST is less damaging than PST.
“Many business people I talk to don’t fully understand what this will mean, don’t understand why it’s beneficial and I think that’s for good reason. I mean, certainly on the government’s part, there’s been a dismal amount of communication and education [about it],” said Niels Veldhuis, a senior economist with the institute and co-author of the report.
He said people need to accept that if they want government to continue providing services there is going to be a certain level of taxation.
“Ideally, a government will implement less costly taxes that do minimal damage to the economy,” he said. “In that sense, the HST is a much better alternative to the current PST.”
The report explains that PST damages businesses because it applies to items purchased to produce goods and services and then again to items consumers purchase retail.
The PST also applies to capital inputs such as machinery and equipment, which in turn, increases a business’ overhead.
Veldhuis told BIV that the media sphere has been filled with anti-HST sentiment lately, and the true benefits of the tax remain largely unknown.
"Obviously, the anti-HST campaign has revved up. It’s based, I think in large part, on emotions and we didn’t think that British Columbians were getting the true story when it came to the HST. I think it’s an important tax change.”
The full list of HST “myths” can be downloaded for free from the Fraser Institute’s website.
Check out this week’s print edition of BIV to learn why the provincial Liberals have had a tough time promoting the HST.