News Local

Replace PST with value-added tax: group

By Michael Mui, 24 Hours Vancouver



The B.C. Chamber of Commerce wants the provincial government to replace the provincial sales tax with a value-added tax — exempting some business-to-busniess transactions from a provincial tax.

Dan Baxter, director of policy development with the B.C. Chamber of Commerce, said businesses have to repeatedly pay tax on every step of producing a commodity, from raw material to finished product, which affects the overall price of the final product.

“The example I give is maybe on a desk someone might buy from The Brick. From the tree being cut down to when it’s shipped to a mill, to the manufacturer, to the desk at The Brick, there’s PST on PST on PST, which inflates the price of the end good,” he said.

“What this would do is allow each business along the points to recoup the PST ... You can call it a business-to-business transaction. Or one business is buying a product to add value to it.

“If a business is buying a product adding value to their product ... they’re not being charged on a good that is needed to take that product to the next level of production.”

Baxter said VATs are common in other places in the world, and that the HST rejected by British Columbians had similar objectives. His proposal is to allow businesses to recoup taxes paid for unfinished products.

He said the proposal could mean that government would have to charge provincial tax on more products to regain lost revenue from businesses paying less tax, but that effects on the final consumer will be limited, since businesses would lower product prices, as they’re paying less tax.

“This could be in the order of billons of dollars of tax revenue that would go back in the pocket of businesses to reinvest,” Baxter said.