Re: H.S.T.
Posted: Nov 3rd, 2012, 10:37 am
SmokeOnTheWater wrote:I thought it was
5% Gst plus 7% Pst = 12%
versus
12% Hst
Same amount but less exemptions with Hst, therefore you pay more taxes.
Certainly, that is what is declared on your receipts when you make purchases, but under PST, your suppliers will have had to pay PST on certain inputs (their goods and services), too. This would be an expense to your suppliers and something which needs to be built into the price of the goods and services they sell you. Further, your suppliers' suppliers would have PST as an expense on certain inputs and would have to build this into the price they charge your suppliers. And so on.
What you end up paying in 'hidden' PST will depend on the nature of the inputs and supply chain necessary for whatever particular good or service you're buying.
By contrast, all HST-registered entities re-claim all HST they pay on their inputs*, so there is no hidden HST on the goods and services you buy.
You can more accurately think of it like this.
Goods: 5% GST plus 7% PST plus ?% hidden PST
Services: 5% GST plus ?% hidden PST
versus
12% HST
It is also kind of striking how simple the HST side of things looks. The GST/PST system is job creation for accountants and finance people, whose salary and benefits you also pay for in the goods and services you purchase and the other taxes you pay.
I would think there are few accountants out there that would choose GST/PST over HST. You've got to think that there is something wrong with a system when the people who stand to benefit from it the most don't want it!
Just to be clear, I am in agreement with everybody else that the government raised more revenue with HST than with GST/PST, but don't forget the hidden PST you're paying on all goods and services when comparing the two systems.
*with the exception of a few things, such as business entertainment, where only 1/2 the HST can be re-claimed, or on exempt supplies where there could well be a component of 'hidden' HST (not to be confused with zero-rated supplies).