Common sense is not so common

It’s all about the harmonized sales tax (HST), which was implemented in Ontario at 13%, - in British Columbia at 12%, - and in Nova Scotia at 15 %. The government of British Columbia announced previously that if the HST survives the referendum, the rate will be reduced from 12 to 10 per cent by 2014.

Under the Comprehensive Integrated Tax Coordination Agreements signed by the provinces with the federal government of Canada, the HST rates cannot be changed for one more year because of the “two year” anniversary date.

 Come what may, some tax payers always remain in mood of tax revolt, so they are seriously dissatisfied and are very angry with HST, while the others are complaining about the confusing language on the ballot paper of the upcoming referendum prepared by the Elections B.C. which is an independent office of the legislature - responsible for administering voting for provincial elections and referendums.

The British Columbians will soon be voting on whether to abolish or keep the harmonised sales tax (HST). More than three million HST ballot packages have already been sent out to registered voters for the August 5 referendum.

In the upcoming referendum, voters can either vote “yes” to extinguish the HST and return to the PST and GST or they can vote “no” to keep the HST.

The Ipsos-Reid poll of 1,117 B.C. voters last month suggests that more than half of those surveyed were confused about what the ballot question meant.

Surprisingly, the anti-HST respondents are more likely to understand that voting “yes” means getting rid of the tax. Where is the problem then?

Question is simple: Are you in favour of extinguishing the Harmonized Sales Tax and restoring the Provincial Sales Tax (PST) in conjunction with the Goods and Services Tax (GST)?

You may vote ‘YES’ if you want to extinguish the painful tax, or you may go head and vote ‘NO’ if you want to keep it. It’s so simple – There isn’t any ambiguity as claimed by many. 



As it’s so straightforward, ‘YES’ means no more HST if total number of "yes votes” exceeds the total number of “no votes.”

On the contrary, a majority of "No" votes means the HST is here to stay. A "no" vote is a vote to keep the harmonized sales tax that is imposed under the Excise Tax Act (Canada) and regulations set by the Government of Canada. Thus, Canada Revenue Agency will continue to administer and enforce the HST in British Columbia.

In order to remove the ambiguity or confusion, despite english as second language, a voter needs a little bit of common sense to understand the “language of referendum” with reasonable ease. Still, it’s hard to believe that there is any confusion. Some confused British Columbians are fussing about nothing really?

Nevertheless, a "YES" vote further means the government of British Columbia has the power to restore the provincial sales tax at the rate of 7% or higher depending on the real outcome of the YES vote.

Furthermore, the sales tax base would shrink to the goods and services that were covered under the Social Services Tax Act (British Columbia).

However, the sales tax base can be expanded by the Government of British Columbia if the majority of legislators vote to approve amendments to the Social Services Tax Act.

But on the other side, a "No" vote means the HST rate will decrease from 12% (current rate) to 11% on July 1, 2012 and to 10% on July 1, 2014 exactly as previously announced.

Under the provincial sales tax system, the BC government can change the sales tax base and the sales tax rate at will.

Yet, at this point in time, the consumers are in the dark having no clue as to what they will really get in place of the HST. Therefore, the consumers have greater stability with the HST, because tax changes are applied at the federal level.

Angrily, the unhappy tax payers maintain that the HST is horrible tax policy for the non beneficiary, and the consumption taxes are bad for the economy and bad for the voter. They discourage people from making purchases.
 

They claim that the taxes on services are just another tax grab on labour. “We already pay taxes on labour - called income tax, and the HST adds up a tax on top of a tax when you tax the services. We don't need to pay anymore.” said many tax payers.

The registered voters must exercise some caution using common sense at the voting hour.

Referendum questionnaire mentions the provincial sales tax will be restored if HST is abolished.

This of course may be leading to another scenario of uncertainty with regard to future taxes.