Canada British Columbia returns to GST and PST

Sat 26th Jan 2013

British Columbia has voted in a referendum to move back to a dual Canadian Goods and Sales Tax (GST) + Provincial Sales Tax (PST) regime from 1 April 2013.

Canada attempts to simplify its indirect sales tax regime

Over the past ten years, many of Canada’s ten Provinces has been moving from a dual Provincial (PST) and Federal (GST) to a single Harmonised Sales Tax (HST) regime.  This is aimed at simplifying compliance obligations on businesses, and providing transparency on the total tax bill between the Provinces.  Manitoba and Prince Edward Island will be the latest Provinces to make the move in April 2013.  Check all Canadian HST GST PST VAT rates here.

British Columbia reverses Canadian Harmonised Tax move

However, after living with the switch to HST since 2010, the population voted last year to undo the reform and return to the old PST and GST system.  The popular view was that it was being used as an excuse to hike prices at the local level.

This will present a challenge to businesses, which in addition to forcing them to administer two tax regimes, will also suffer losses on unrecoverable PST.

Click for free Canadian VAT info