Most business owners don’t understand new HST rules

Everyone is wondering abouth the harminized tax. We had the same system in the 50's & 60's with the provincial and federal tax hidden in the price of items. The only thing differnt now is the taxes will be out in the open for people to see instead of hidden in the price. So I don't see where any problems will come out of it as we have lived with it before.

How memory be so short? Remember the GST in Ontario? It became a cash cow for the government instead of being revenue neutral.. I do not believe the HST will end up be any different. It is the same with Ontario Hydro..shows us the charges lol telling us there is no differnce in what we will end up paying yet they have a minimum charge regardless of how little energy is actually delivered. Is this the new Math finally evident after all these years? 1+1 actually equals 4 ahahaha I was happier and bottom line wealthier living in ignorance of what I was supposedly actually paying.

At Least the GST was 7% and it replaced the hidden 13% tax. Yes the GST was a cash cow but at least Mulruney had the presence of mind to reduce the tax rate when he added it to more produces and services. Our premier and some of these so called "Ecomimists" that contimue to say it is revenue nutural should go back to grade 3 and take the math class over again. Giving the people of Ontario a small tax break with a minimal payment for the first year will not reverse the amount we will have to pay on all the services he has added it to. I own a small business and i have gone over this HST with other owners and accountants, NOT ONE has been able to tell me how it will be easier on us and save us money. BUT.... We will be charging more for our services come July 1st 2010. I WILL BE TRACKING OUR CANCELLATION RATE DUE TO THE UNWANTED RATE INCREASE AS OF JULY 1ST AND ALL LOST BUSINESS WILL BE MADE PUBLIC!

Where will the HST affect me...I was finally looking forward to going to the hairdresser regularly...I thought I could finally afford it...and then McGinty stepped in and ruined it for me.
It may sound like I"m "nit picking"...but we are WAY over taxed in this province and I'm 1/2 way through my life...and I"m getting very sick of living "dollar to dollar" because the government has chosen to run my life for me.

To Stravros

You should go check out the HST website links above as you are obviously in the 56% that don't understand the effects this will have on your business.

Yes, on your product you will now have to charge HST which was higher than the old GST amount. However consider this.

1. You lkley used to have to charge PST (depending on your product). If you did then what you charge won't really change.

2. Even if you happen to previously sell a PST exempt item now all the expenses that you used to be charged PST on will decrease as instead you will be charged HST WHICH CAN CAN FULLY CLAIM BACK.

So net effect is that the there will no longer be a "hidden" PST tax that would build down the supply chains to the final consumer and instead one single "equivalent" tax just on the end transaction. Yes now you charge more in HST on your goods but the cost of all your expenses should decrease allowing you to decrease the price of the product you sell to offset the new HST tax.

Why do this you wonder? The reduced administration will save a fortune in administrative fees allowing your government to be more efficient and therefore have to charge you less mtax for the same services.

So feel free to complain about the conversion process as it will be a painful adjustment. But remember that in the end it will likely cost you less.

lol...when does business ever decrease the cost of thier product? The cases I have seen of any kind of price reduction are few and far between. If there is a savings, business just increased their profit margins. Rarely are any of these savings passed onto the regular consumer. Even things that used to be a cost of business are now being passed on. eg)charges for bags at stores, charges to use debit. Some companies are now asking to be paid to issue a paper invoice. Shouldnt be much longer before the taxes and environmental fees, etc etc will be 30-40 % of the products purchase price.
I am getting cynical arent I?

Dear Mr. Tax Guy,

Your explanation to Stavros is typical of the responses we hear from MPP's and tax proponents. Your explanation of how the decrease in expenses should trickle down to the consumer may sound good in theory but in the real world...IT NEVER HAPPENS. The implementation of the GST is a classic example of what a monumental failure of policy this was and illustrates the difference between theory and reality! However, at least it was only 7% & now only 5%.

I have been very vocal with my MPP and all I get back is the prepared response that all Liberal MPP's have been giving and they never explain the government's version of the basic math with respect to the HST, particularly as a consumer.

With respect to your comments regarding the reduced cost of administration, all the provincial government has done is passed on this expense to the federal level and agreed to payout over $25 million dollars in severance to tax collectors WHO DID NOT LOSE THEIR JOBS and were given a raise!

What have we saved? There is still only one taxpayer and we still have to pay for the same number of tax collectors at the federal level only that we have the privilege of paying more for doing the same job!! The politicians and tax proponents just choose to ignore this kind of simple math.

This is typical of government waste and incompetence. While there may be a bit of convenience for businesses, this is nothing but a monumental tax grab that will affect all of us in ways that we have yet to learn!

Well Joe

1. The CRA already manages the GST and has all the individuals in place and the administration network provided. Converting to HST isn't much more complicated on their administration side than changing the rate from 5% to the new HST rate. All of the administration, however, that went to PST can now be abolished and those resources put to better uses. Even if, as you claim above, those auditors aren't being let go they can be redeployed to other divisions. Trust me in the government only auditors can really be considered revenue generating so having them able to audit is a cost effective thing (plus it will keep people a little more honest with their tax filings).

2. I have worked extensively helping people with tax planning but this doesn't mean I am a proponent of taxes. Trust me my job is quite the opposite.

3. HST simplifies the system and thus reduces adminstration costs. Who wants more complicated taxes that cost more to administer? Have you even looked at the Income Tax Act lately? It now runs 2,346 pages (which doesn't include GST, HST, PST or a number of other items). Even on the corporate side having 2 expense taxes adds extra adminstrative work that will now be saved. And my point above is still valid. The business owner above was concered that increased prices will reduce his sales but it is clearly demonstratable that his costs will also decline so he can take the windfall and sell less or pass the savings and maintain his sales volumes. Its his choice.

Conceptually HST is a reasonably good type of taxation as it taxes consumption and not earnings. It seems fair to consider those that consume the most in society should pay the most tax. It works better than taxing those that earn the most (ie. income tax) because in that scenario people will not have an incentive to earn more thus stalling the economy wheras with the HST it basically stimulates saving which is something Canada is in desperate need of.

So I don't like taxes but HST is a sound idea as long as the changeover is handled in an efficient manner.

To "The Tax Guy" --How do you figure that it is fair to tax those more that consume more?
What is wrong with someone who earns a good living and worked hard and made more money, consuming more?? And...on the other side of this coin...did you realize that people who aren't as wealthy, just might throw MORE money into the economy IF the money is in the CONSUMER'S pocket to use??
Actually LESS taxation is a win-win situation for everyone concerned. I don't see a reason to penalize someone who wants to enjoy their hard earned money THEIR way. IF they are becoming more "earth" conscious, which I believe we all are, slowy. Can you give me a good reason?

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How can it be called a consumption tax when the largest consumer (business) doesnt pay this. I understand if something is going to be manufactured and resold but business does consume goods paper, cups, utilities etc etc and pay no GST.

If goverments are in a hurry to implement a tax, call it what you want, it's a tax increase. Ultimatly we have to expect new taxes on a regular basis because all goverments, at all levels, are bankrupt! They are in deficits, despite the fact that they increase taxes, and decrease services, they can't close the gap, and it's getting worse every year, Untill they reduce and cut some of what they pay-out, it will continue to spirall out of control....

Hello ! New Hampshire and other states do not charge ANY sales tax,no INCOME TAX either.How do THEY do it ? Check out their roads (hello Quebec) gas and BOOZE .All other nearby states residents buy in NH.NO federal sales TAX,Would it work in Canada ? Why not ?
On a $ 150,000.house I pay a municipal tax of $950.00 + $ 300.00 school tax,garbage,cops,water road work NOT included.If my house was worth more ,I would be taxed accordiingly more ( %) for the same services ??? Yea SUCKERS.

And check this out : here in QC I deliver soft drinks for a local company.When I make out the bills I charge the retailer both taxes (about 12.5 %) and when the retailer sells a bottle of pop,guess what ? he charges both taxes AGAIN but on a higher amount per bottle.Does that sound FAIR to you ? Seems to be about 29%.Does the same apply to gas,plane tickets and cars.Cheers !

This is just another thinly disguised money grab from our illustrious government.

I propose a TEA PARTY similar to the Boston Tea Party.

If you need a way to make more money to pick up on all this HST costs that are going to come about. You guys should consider doing some stock trading at home.

check out where I learned it, I'm making about $1500.00 extra a month now.

www.metotrade.ca

their located in toronto but I learned online with them

I'm going to start going over the border twice a week now, to reduce my HST footprint.