HST transition time chance to reform tax system, says prof

B.C. voters have ditched the controversial HST, but a Royal Road University business professor says the time is still ripe for the province to streamline it’s sales tax system.

B.C. voters have ditched the controversial HST, but a Royal Road University business professor says the time is still ripe for the province to streamline it’s sales tax system.

Terry Power, a professor of strategic and advanced international studies in the RRU school of management, argues the HST was a good system for British Columbia, but rolled out in a ham-fisted way due to shabby planning.

Like many observers, Power blames the failure of the HST referendum on how former premier Gordon Campbell imposed the tax shortly after the 2009 election, and with no broad public consultation.

Power suspects mounting Winter Olympic costs may have spurred the government to seek new revenues more than the lagging global economy, and says the $1.6 billion in transition funding was a “quick fix” for a government in panic.

“The process was not done correctly due to the idiosyncrasies of (Campbell),” Power said. “The HST was a good tax, it was a step toward what I call a universal flat tax.”

The 18 month transition period to revert back to GST-PST gives the government the window to create a simple single sales tax system in an open and transparent way, he said.

Small and medium business is overburdened with red tape, Power argues, and sales taxes, if not income taxes, should be simplified for all.

“The government is at a crossroads. It can return to GST-PST and  hire 300 tax collectors and spend $300 million,” he said.

“Or they can take the opportunity to revise the tax system and return to a flat tax, if (the government) communicates what it’s doing. Campbell tried to hand down change without communicating,”

Anything akin to the HST might be seen as politically toxic within government, but Power said Premier Christy Clark isn’t completely tarnished by the Campbell era.

“I think people will work with Clark,” he said. “She has demonstrated a willingness to collaborate and talk with people.”




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