Editorial — Return of the PST
The provincial government is bringing back the provincial sales tax (PST).
It had no choice — it was told to do so by voters last summer in the HST referendum. The harmonized tax, and most specifically, the way it came about, was so reviled that a majority of voters were quite prepared to bring back the PST. This despite the fact that the PST is not nearly as efficient a tax, and does not come with the tax credits that the HST does.
Voters weren’t even swayed by a provincial promise to reduce the HST to 10 per cent, which would be two per cent lower than the combined GST and PST.
The provincial Liberal government had no one to blame but itself, although that hasn’t stopped it from blaming leaders of the Fight HST campaign, the media, rebellious citizens and the NDP.
But it has now done what it had to do, and the new PST looks like it will be at least a little simpler for businesses to deal with. Payments can be made online and timelines will be more harmonized with the GST remittance schedule.
While the government’s new PST bill does not specify what goods and services will be exempt from PST, Finance Minister Kevin Falcon said the exemptions will be similar to those under the old PST. The list of goods and services to be exempted will be published as a regulation, making it easier for the government to add and take away from the list of exempt items.
While this naturally has raised some suspicions, as the Liberals’ record on the HST has been one of a long series of broken promises (remember the promise that the price of goods would come down because of the HST?), it will probably be more efficient. It will be up to the media, opposition politicians and the public to publicize PST exemptions and any changes to them.
The entire HST exercise was beneficial in several respects. It showed that citizens have the power to put limits on governments that exceed their mandates. There was no promise of an HST in the 2009 election. Two months later, it was government policy.
B.C. referendum law allowed citizens to overthrow this reversal in policy. The HST debacle caused one premier to leave office and may yet cause the defeat of the government.
Future governments will be much more cautious in going against public will, and refusing to listen to reasonable concerns.