Today is the day British Columbia returns to the PST/GST system and bids farewell to the HST.
The return to a new iteration of the old system is a result of a provincewide referendum that took place in the summer of 2011. The referendum saw B.C. voters choose to return to the 5% GST + 7% PST system in place of the 12% HST system, which came into effect July 1, 2010.
Businesses will no longer be able to claim input tax credits for the 12% paid on HST on any purchases not related to goods being resold, and will now be eligible to claim only the 5% GST portion.
The return to the PST/GST system will provide some upsides for those who like to dine out, as restaurant bills will be subject to 5% GST rather than 12% HST.
Ian Tostenson, president and CEO of the BC Restaurant & Foodservices Association, told Business in Vancouver, “It is really good for the restaurant industry because what we’ve identified is a savings for a family of around $200 per year. We expect an increase in sales of 4-6% this year.”
Tostenson had previously stated that the implementation of the HST had led to a drop in sales of about 8%, industry wide.
According to small business minister Naomi Yamamoto, about 25% of the province's 100,000 small businesses have yet to register for the new PST.
More information about the return to the PST can be found here.
@EmmaCrawfordBIV
