Harmonized Tax to Help BC Small Business: Report

The combined HST/GST will be a boon to British Columbia’s economy, according to a University of Calgary study that singles out small businesses as one of those set to benefit.

The report highlights the lower taxes rates on new investments that would stem from a harmonized tax and other tax reform exemptions. And though it notes that larger businesses, like construction and communications will see those taxes drop by a third, “ the elimination of sales taxes on business inputs will more than halve small businesses’ tax burden on new investment,” states “British Columbia’s Harmonized Sales Tax: A Giant Leap in the Province’s Competitiveness.”

Small businesses will see their effective tax rate drop from 24.7% in 2009 to 11.5% in  2010, then fall further to 9.9% in 2010 with the elimination of the small business tax, according to the author, Jack Mintz, a professor at the University of Calgary’s School of Public Policy. He notes that household and business services will also gain ground  along with the construction and communications sector, concluding that the tax reforms “will have a profound
effect on capital investment, jobs, and incomes in the province.”

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