The HST and you
By now you've heard about the
harmonized sales tax, effective as
of this past July 1, but it's time to
figure out how it affects you as a
student.
Starting at the beginning, not much has changed, said member of provincial parliament and parliamentary assistant to the minister of revenue, Yasir Naqvi. The HST, which combines five per cent provincial sales tax and eight per cent goods and services tax, affects some aspects of our daily lives but not much.
“Eighty-three per cent of things we bought before July 1, we paid 13 per cent or no sales tax. After July 1, it didn't change,” said Naqvi, referring to items like electronics and restaurant services. In these cases, the taxes were merely combined.
So what do students need to be aware of?
Some items will now be exempt from PST. Books for school, for example, will just be affected by the five per cent GST. Any prepared food under four dollars will only have five per cent tax applicable. Groceries are unaffected. Alcohol will also see no change. Students with children don't need to worry about childcare services increasing either.
Big-ticket items like tuition have no HST. Computers are still at the 13 per cent tax as they already have both taxes applied to them. But traveling home may cost a little extra. Greyhound and Via Rail trips within Ontario will see an increase in taxes, but those originating in Ontario and going outside of Canada will be exempt from HST.
Where the changes are noticeable are in services — where the other 17 per cent of our spending goes, said Naqvi. For example, haircuts used to have five per cent sales tax, now have 13 per cent. Also services such as regular massages and similar pampering will be hit by HST.
But these changes, in turn, mean less in the way of income tax. For students, if you make taxable income, you will pay less, said Naqvi. If you don't make that much income, or any, you get a bigger refund, he added.
“Ninety-three per cent of Ontario are paying less income taxes,” he said.
The effects of the HST also means more jobs for Canadians, he explained.
“We need to make sure we recreate and grow the economy. The recession was devastating, 250,000 jobs lost,” said Naqvi.
Previously, with PST and GST, businesses lost out because the PST just went to the government. With HST, it acts as a “valueadded tax.” Instead of businesses just getting back the five per cent, they get the full 13 per cent.
“It's a huge cashflow back into their pockets so they can reinvest,” said Naqvi.
The result will be about 591,000 jobs created over a 10 year period or so, and individuals' salaries increasing by eight per cent, posits Jack Mintz, a professor and leading tax expert at the University of Calgary in his independent study.
Canada is just catching up in terms of implementing the harmonized sales tax. Currently 140 countries have it in place, said Naqvi.
“We will reduce tax burdens on incomes,” he explained. “By decreasing the burden, you are making sure people keep more money in their pocket.”
“One of our problems in North America — we're a consumer society. Other societies don't do that. We need to have more focus on saving money.”
For more information on the HST and what it does and doesn't affect, visit http://www.rev.gov.on.ca
Starting at the beginning, not much has changed, said member of provincial parliament and parliamentary assistant to the minister of revenue, Yasir Naqvi. The HST, which combines five per cent provincial sales tax and eight per cent goods and services tax, affects some aspects of our daily lives but not much.
“Eighty-three per cent of things we bought before July 1, we paid 13 per cent or no sales tax. After July 1, it didn't change,” said Naqvi, referring to items like electronics and restaurant services. In these cases, the taxes were merely combined.
So what do students need to be aware of?
Some items will now be exempt from PST. Books for school, for example, will just be affected by the five per cent GST. Any prepared food under four dollars will only have five per cent tax applicable. Groceries are unaffected. Alcohol will also see no change. Students with children don't need to worry about childcare services increasing either.
Big-ticket items like tuition have no HST. Computers are still at the 13 per cent tax as they already have both taxes applied to them. But traveling home may cost a little extra. Greyhound and Via Rail trips within Ontario will see an increase in taxes, but those originating in Ontario and going outside of Canada will be exempt from HST.
Where the changes are noticeable are in services — where the other 17 per cent of our spending goes, said Naqvi. For example, haircuts used to have five per cent sales tax, now have 13 per cent. Also services such as regular massages and similar pampering will be hit by HST.
But these changes, in turn, mean less in the way of income tax. For students, if you make taxable income, you will pay less, said Naqvi. If you don't make that much income, or any, you get a bigger refund, he added.
“Ninety-three per cent of Ontario are paying less income taxes,” he said.
The effects of the HST also means more jobs for Canadians, he explained.
“We need to make sure we recreate and grow the economy. The recession was devastating, 250,000 jobs lost,” said Naqvi.
Previously, with PST and GST, businesses lost out because the PST just went to the government. With HST, it acts as a “valueadded tax.” Instead of businesses just getting back the five per cent, they get the full 13 per cent.
“It's a huge cashflow back into their pockets so they can reinvest,” said Naqvi.
The result will be about 591,000 jobs created over a 10 year period or so, and individuals' salaries increasing by eight per cent, posits Jack Mintz, a professor and leading tax expert at the University of Calgary in his independent study.
Canada is just catching up in terms of implementing the harmonized sales tax. Currently 140 countries have it in place, said Naqvi.
“We will reduce tax burdens on incomes,” he explained. “By decreasing the burden, you are making sure people keep more money in their pocket.”
“One of our problems in North America — we're a consumer society. Other societies don't do that. We need to have more focus on saving money.”
For more information on the HST and what it does and doesn't affect, visit http://www.rev.gov.on.ca
