Editor’s note: Corrects information related to the HST and PST increases.
Local business owners have mixed reactions towards the re-implementation of the Provincial Sales Tax (PST), which came back into effect this past Monday.
Businesses have had to apply for a PST number in order to make retail sales and leases, in a system that will take over for the 12 per cent Harmonized Sales Tax (HST).
“I think most businesses are certainly aware of it, it’s just another process that small businesses have to implement, which is always hard when you have small businesses because it’s not like a big corporate structure where there is an accountant on staff that will make those changes,” said Wendy McCulloch, general manager of Community Futures Boundary. “The person that does everything is now going to have to make one more change.”
Roger Soviskov, owner of Jogas Espresso Café, says the re-implementation of the PST is good for the restaurant industry.
“Everything on my menu is going to be cheaper,” he said.
The implementation of the HST in July 2010 meant that services, such as dining and haircuts, were subject to a seven per cent rate hike, whereas before they were exempt from the seven per cent PST.
Now with the re-introduction of the PST, customers will no longer have to pay an additional 12 per cent for these services but will be still be subject to the five per cent Goods and Services Tax (GST).
“Now whatever price they see on the board is they price they are going to pay,” Soviskov said. “People are really going to like that because that (HST) tax really added up.“
However, other businesses are not welcoming the change with open arms.
“It’s going back to a very primitive situation,” said Lorraine Van Boeyen, owner of Select Office Supplies. “It’s about four times as much work; it’s the worst thing that could have happened to small business.”
She said the HST, which was a combination of the five per cent federal GST and the seven per cent PST, was a simple and beautiful tax for business owners,
One of the pains of re-introducing the PST means that owners need to report to the province monthly, she said, where as she only had to report quarterly with the HST.
“Now I have to reprogram my whole computer system as well,” she said.
Jim Burch, a certified general accountant and partner with Kemp Harvey Burch Kientz Inc., said that costs will most likely go up for some businesses.
“It’s not just a one-time cost for instance to reprogram their various point of sales systems, but there is also an ongoing cost of separating out that tax, calculating that tax, which in some cases, or some businesses, is much more complicated than others and then filing the returns on a monthly basis and dealing with the government bureaucracy about another level of taxes,” he said.
Joe Sheremeto with Neighbours Computers agreed that going back to the PST just means a lot of extra paper work.
“From the viewpoint of ease, I think the HST is an easier process to use, having the dual tax and having to figure out what we do charge is a lot more difficult of a process,” he said. “With HST you just charged for everything, one tax one process.”
Community Futures, Kemp Harvey Burch Kientz Inc. and the Boundary Country Regional Chamber of Commerce put on two workshops in March to try and educate local businesses about the re-implementation of the PST.