EDITORIAL: No guarantees of lower bills under PST

While restaurants expect diners to pay less, the real effect of return to PST are anyone's guess

With the return to a combination of a seven-per-cent provincial sales tax and five-per-cent federal goods and services tax April 1, the harmonized sales tax experiment will come to an end in B.C.

Taxpayers shouldn’t count on having more money left over at the end of the month, however, as the changes made by the province in the wake of the initial HST – tax credits for lower-income families and seniors among them – will also come to an end.

There will nonetheless be good news for consumers in certain sectors.

Butchart Gardens food and beverage manager Bob Parrotta, who serves as the Victoria branch chair for the B.C. Restaurant and Foodservices Association, insists that patrons will see a reduction on their bills after the PST is reinstated, with the net result being a four to five-per-cent increase in sales.

If that materializes, and there’s no guarantee it will, it could create jobs and benefit other related businesses. Other consumers, such as those planning to purchase a brand new home or buying a new bike, may see large savings in one transaction.

The HST was supposed to provide a less complicated tax regime for the sale of goods and services and eliminate exemptions and hidden taxes created under the PST/GST system.

There were still loopholes. For example, a person buying a donut at Tim Horton’s would pay tax on their purchase, while the same donut at a grocery store would not be taxed, since it was considered a grocery item.

We hope the work the province has done on reforming the PST, since the public voted the HST out with a 55-per-cent majority, makes B.C.’s tax system more streamlined.

Regardless, the public can’t expect things to be perfect under a system previously found to be inefficient and unfair, not to mention unwieldy for business.

At the very least, we fully expect businesses that complained loudest about the HST to put their money where their mouth is and prove to customers they are saving money under PST/GST.