Taxes, Taxes, Taxes

Tax credit HST

The new HST will be implemented in BC starting tomorrow.  There are arguments for and against the new taxation system.  One thing for certain though, consumers will feel the initial pinch before they feel the benefits.

For most small businesses, the HST theoretically will help as the input tax credit has now been raised.  However, businesses will tie up capital for months and may not pass on savings until there is a clear track record and greater incentive to do so.

Likewise for consumers who may be eligible for tax credits, they may wish to hold off or scale down on purchases, as they do not wish to tie up cash for months.

In all likelihood, business activity will probably drop for the first few months as consumers scale back on previously PST exempt goods and services until it becomes more clear that the HST is a benefit to both consumers and businesses alike.

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