British Columbia’s Harmonized Sales Tax: A Giant Leap in the Province’s Competitiveness
British Columbia’s harmonization of its sales tax with the federal goods and services tax (GST) will result in a giant leap in the province’s competitiveness, both domestically and internationally. By 2020, the combined effect of federal and provincial corporate tax cuts and sales tax harmonization...
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ftdoajarticles:oai:doaj.org/article:bf105bc986b1436c90d885b15843949c 2023-05-15T17:22:59+02:00 British Columbia’s Harmonized Sales Tax: A Giant Leap in the Province’s Competitiveness Jack M. Mintz 2010-03-01T00:00:00Z https://doi.org/10.11575/sppp.v3i0.42335 https://doaj.org/article/bf105bc986b1436c90d885b15843949c EN eng University of Calgary https://www.policyschool.ca/wp-content/uploads/2016/03/bctaxonline.pdf https://doaj.org/toc/2560-8312 https://doaj.org/toc/2560-8320 https://doi.org/10.11575/sppp.v3i0.42335 2560-8312 2560-8320 https://doaj.org/article/bf105bc986b1436c90d885b15843949c The School of Public Policy Publications, Vol 3, Iss 4, Pp 1-16 (2010) Political institutions and public administration (General) JF20-2112 article 2010 ftdoajarticles https://doi.org/10.11575/sppp.v3i0.42335 2022-12-31T04:12:52Z British Columbia’s harmonization of its sales tax with the federal goods and services tax (GST) will result in a giant leap in the province’s competitiveness, both domestically and internationally. By 2020, the combined effect of federal and provincial corporate tax cuts and sales tax harmonization is expected to increase the province’s capital stock by more than $14.4 billion and add 141,000 new jobs. Sales tax harmonization alone will account for an increase of $11.5 billion in capital investment and a net increase of 113,000 jobs by the end of the coming decade. British Columbia’s tax reform, especially its adoption of the harmonized sales tax, also will reduce the marginal effective tax rate (METR) on capital for all industrial sectors and all sizes of businesses. Even though selected exemptions were provided to relieve some capital goods from the existing retail sales tax, sales tax harmonization will remove most taxes on capital purchases after July 1, 2010. Sales tax harmonization will reduce the METR on capital for large and medium-sized companies from 29.5% in 2009 to 21.6% in 2010, while additional corporate tax reductions will further reduce the METR to 20.5% in 2010 and to 17.9% by 2018. For small businesses, the METR will decline sharply from 24.7% in 2009 to 11.5% in 2010, primarily due to sales tax harmonization. With the reduction of the small business tax rate to zero in 2012, the METR on small business investment will decline further to 9.9%. By 2018, British Columbia’s METR on capital will be internationally competitive — lower than the current rate in Australia, France, Germany, Italy, Japan, South Korea, the United Kingdom, and the United States, about the same as in New Zealand, and only slightly above that in the Netherlands and China. It will also be lower than in all other provinces — notably including Alberta — except Newfoundland and Labrador, Nova Scotia, and New Brunswick, which have already harmonized their sales taxes with the federal GST. Article in Journal/Newspaper Newfoundland Directory of Open Access Journals: DOAJ Articles Newfoundland New Zealand |
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Open Polar |
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Directory of Open Access Journals: DOAJ Articles |
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ftdoajarticles |
language |
English |
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Political institutions and public administration (General) JF20-2112 |
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Political institutions and public administration (General) JF20-2112 Jack M. Mintz British Columbia’s Harmonized Sales Tax: A Giant Leap in the Province’s Competitiveness |
topic_facet |
Political institutions and public administration (General) JF20-2112 |
description |
British Columbia’s harmonization of its sales tax with the federal goods and services tax (GST) will result in a giant leap in the province’s competitiveness, both domestically and internationally. By 2020, the combined effect of federal and provincial corporate tax cuts and sales tax harmonization is expected to increase the province’s capital stock by more than $14.4 billion and add 141,000 new jobs. Sales tax harmonization alone will account for an increase of $11.5 billion in capital investment and a net increase of 113,000 jobs by the end of the coming decade. British Columbia’s tax reform, especially its adoption of the harmonized sales tax, also will reduce the marginal effective tax rate (METR) on capital for all industrial sectors and all sizes of businesses. Even though selected exemptions were provided to relieve some capital goods from the existing retail sales tax, sales tax harmonization will remove most taxes on capital purchases after July 1, 2010. Sales tax harmonization will reduce the METR on capital for large and medium-sized companies from 29.5% in 2009 to 21.6% in 2010, while additional corporate tax reductions will further reduce the METR to 20.5% in 2010 and to 17.9% by 2018. For small businesses, the METR will decline sharply from 24.7% in 2009 to 11.5% in 2010, primarily due to sales tax harmonization. With the reduction of the small business tax rate to zero in 2012, the METR on small business investment will decline further to 9.9%. By 2018, British Columbia’s METR on capital will be internationally competitive — lower than the current rate in Australia, France, Germany, Italy, Japan, South Korea, the United Kingdom, and the United States, about the same as in New Zealand, and only slightly above that in the Netherlands and China. It will also be lower than in all other provinces — notably including Alberta — except Newfoundland and Labrador, Nova Scotia, and New Brunswick, which have already harmonized their sales taxes with the federal GST. |
format |
Article in Journal/Newspaper |
author |
Jack M. Mintz |
author_facet |
Jack M. Mintz |
author_sort |
Jack M. Mintz |
title |
British Columbia’s Harmonized Sales Tax: A Giant Leap in the Province’s Competitiveness |
title_short |
British Columbia’s Harmonized Sales Tax: A Giant Leap in the Province’s Competitiveness |
title_full |
British Columbia’s Harmonized Sales Tax: A Giant Leap in the Province’s Competitiveness |
title_fullStr |
British Columbia’s Harmonized Sales Tax: A Giant Leap in the Province’s Competitiveness |
title_full_unstemmed |
British Columbia’s Harmonized Sales Tax: A Giant Leap in the Province’s Competitiveness |
title_sort |
british columbia’s harmonized sales tax: a giant leap in the province’s competitiveness |
publisher |
University of Calgary |
publishDate |
2010 |
url |
https://doi.org/10.11575/sppp.v3i0.42335 https://doaj.org/article/bf105bc986b1436c90d885b15843949c |
geographic |
Newfoundland New Zealand |
geographic_facet |
Newfoundland New Zealand |
genre |
Newfoundland |
genre_facet |
Newfoundland |
op_source |
The School of Public Policy Publications, Vol 3, Iss 4, Pp 1-16 (2010) |
op_relation |
https://www.policyschool.ca/wp-content/uploads/2016/03/bctaxonline.pdf https://doaj.org/toc/2560-8312 https://doaj.org/toc/2560-8320 https://doi.org/10.11575/sppp.v3i0.42335 2560-8312 2560-8320 https://doaj.org/article/bf105bc986b1436c90d885b15843949c |
op_doi |
https://doi.org/10.11575/sppp.v3i0.42335 |
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1766109945894273024 |