BC: Reduction of HST to 10% now required by law
By CO Staff @canadaone | June 10, 2011
BC -- The government's commitment to reduce the HST to 10 per cent — if the tax survives the upcoming referendum — was passed into law today.
"We want people to know if they vote to keep the HST that the reduction will take place by law. Today's action by the federal government puts the proposal to reduce the HST in B.C. to 10 per cent into law," said Premier Christy Clark.
"If British Columbians vote 'No' to higher taxes in the referendum, then the 10 per cent HST is locked in."
If voters choose to keep the HST, the reduction to 10 per cent will take place in two stages:
- On July 1, 2012 the government will cut the provincial tax portion, which is currently set at seven per cent, to six per cent.
- It will then cut the rate by an additional one per cent in July 1, 2014, bringing the provincial portion to five per cent.
However the business community has raised concerns that a reduction of the HST will mean higher taxes for businesses.
A government news release explained how it would make up the lost revenues from a reduction of the HST by increasing the general corporate income tax rate from the current 10 per cent to 12 per cent on Jan. 1, 2012.
It also plans to postpone the reduction in the small business tax rate planned for April 1, 2012.
The government has said that these measures would be temporary until the fiscal situation allows for further reductions.
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