Post date: May 26, 2011 8:09:27 PM
After broad consultation with citizens, the BC Liberal government announced today it will lower the harmonized sales tax from 12 percent to 10 percent over the next three years to strengthen the finances of BC families.
The highlights from today’s announcement include:
• The HST will be cut by 1 percent on July 1, 2012, and a further 1 percent reduction will take effect on July 1, 2014 – taking the tax down to the 10 percent level.
• To help offset the costs of the HST before the rate reduction in 2012, one-time transition cheques of $175 per child will be issued to families with children under 18 years old. In addition, low-and modest-income seniors will also receive a one-time transition cheque of $175. Transition cheques will be issued by the end of the year.
• The independent panel that reviewed the HST and the PST plus GST tax systems recently estimated that families now pay an average of $350 more in sales tax under the HST than they paid with the PST plus GST system. With a 10 per cent HST rate, instead of paying $350 more tax, B.C. families will on average pay $120 less tax than under the PST.
• As the BC Liberal government is committed to balancing the budget by 2013/14, to compensate for the HST break to families we will increase the general corporate income tax rate to 12 percent from the current 10 percent on Jan. 1, 2012, and postpone the reduction in the small business tax rate planned for April 1, 2012. Despite this change, since 2001 the BC Liberal government will still have reduced corporate income tax rate by 4.5 percent and the small business tax rate by 2 percent.
To read more detailed information on today’s announcement, please click here.