Harmonized Sales Tax
Harmonized Sales Tax was introduced in the Ontario province of Canada on July 1st, 2010. The Harmonized Sales Tax has combined the Goods and Services Tax (GST) and the Provincial Sales Tax (PST). The resultant tax is an HST of 13 %. While a lot of people supported this tax system, there were others who were against this and disapproved of this new tax system.
The HST was announced by the Ontario government in the 2009 budget. The economic recession forced the government to look for new ways to bring in investments and create new jobs. This was the major reason for the implementation of HST. They believed that this new form of tax had the potential to increase the province’s competitiveness. The previous tax system was unfair to the businesses because of the implementation of taxes at every step in the production, distribution and retail phases. The implementation of HST has improved the competitiveness of Ontario’s businesses by refunding sales tax on most business inputs. This has effectively removed hidden taxes from the system and hence lowered the cost of doing business in Ontario. This has also led to more savings, more jobs, higher incomes and increased investments in the province. As of now, HST has been implemented in five provinces in Canada – Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island.
Response from the public
In spite of all the advantages of this system, not everyone supported the implementation of HST. One of the major reasons for opposing this tax system was that some items which previously had low tax rates were being taxed heavily in the HST regime. Some of these items include gasoline, electricity, heating fuels, real estate, tobacco, personal services and professional services. In spite of all the oppositions by a certain section of the public, HST has been successful in improving the economic scenario of the Canadian provinces where they were introduced.
To benefit out of the HST system, you will need to have a better understanding of the system. Besides understanding HST, you will have to know how to calculate HST. If you do not have the time to learn the process of HST calculation, you can take help. There are a lot of online resources available today that can help you calculate the HST of a product/service based on the province. Use an online HST calculator for calculating HST for any Canadian province where Harmonized Sales Tax is used. This will not only save your time, but you will be assured that you get accurate results on the calculations. An online HST calculator is designed to perform HST calculations easily. This is helpful for businesses, especially the small and medium-sized businesses in the HST influenced provinces of Canada.
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