"Remember the system was set up by the Federal government so that they would have your money "
Time out!
Most GST paid in Canada is by Canadians for goods and services used in Canada.
Retailers and manufacturers receive the 7% GST from their customers, put the money in the bank or use it for their business and eventually remit it to the Federal government.
The exception is sales outside the country (zero rated).
Looking at the big picture, in general terms, Canadian businesses cash flow benefits by holding government funds (GST) until they remit.
Time out!
Most GST paid in Canada is by Canadians for goods and services used in Canada.
Retailers and manufacturers receive the 7% GST from their customers, put the money in the bank or use it for their business and eventually remit it to the Federal government.
The exception is sales outside the country (zero rated).
Looking at the big picture, in general terms, Canadian businesses cash flow benefits by holding government funds (GST) until they remit.
Sorry Malcolm, but your suggestion of an exemption for exporters leaves the system wide open for abuse. Goods could be purchased without GST paid and claims could be made that 100% were exported. The "pay-as-you-go" system that we have in place, while not perfect, provides the feds with ongoing revenue.
The whole point of the input credit system we have in place is that it operates similar to a bank account - you put funds into the system and you withdraw the portion of funds applicable to exports back out when you report. The PST system works strictly as a consumer tax. The provinces would switch in a heartbeat if they could because they only draw revenue from retail sources that report to them. So when I ship an item from Ontario to Quebec the feds get their money while the province of Quebec goes without.
Under law, residents of a province are supposed to forward applicable tax to their provincial receiver for purchases made out of province or country but we both know that that rarely happens.
The GST was introduced as a replacement for the old FST which was a manufacturers sales tax. Clawback for that tax for exported goods required a substantial burden of proof that items were exported, a certified statement (under penalties) that the goods were exported and the sacrifice of a goat. :>)
The system, as it stands today, is hugely improved over what we once had where the tax was totally hidden from the consumers view.
Cheers!
Bill
The whole point of the input credit system we have in place is that it operates similar to a bank account - you put funds into the system and you withdraw the portion of funds applicable to exports back out when you report. The PST system works strictly as a consumer tax. The provinces would switch in a heartbeat if they could because they only draw revenue from retail sources that report to them. So when I ship an item from Ontario to Quebec the feds get their money while the province of Quebec goes without.
Under law, residents of a province are supposed to forward applicable tax to their provincial receiver for purchases made out of province or country but we both know that that rarely happens.
The GST was introduced as a replacement for the old FST which was a manufacturers sales tax. Clawback for that tax for exported goods required a substantial burden of proof that items were exported, a certified statement (under penalties) that the goods were exported and the sacrifice of a goat. :>)
The system, as it stands today, is hugely improved over what we once had where the tax was totally hidden from the consumers view.
Cheers!
Bill
Malcolm, GST (Goods and SERVICES Tax) by its very definition should apply to services including lawyers fees and real estate services. Why wouldn't they? What is inherent about those services that should make them exempt from an all-encompassing tax?
I would be much more in favour of seeing certain other services withdrawn from taxable status before those. Shouldn't basic necessities be more valid as tax-free before those that you have hi-lighted (ie clothing, personal hygiene items, etc)? The services you feel should be tax free are often limited to those that have the means to afford them. A person making minimum wage often can't afford a lawyer or real estate but they should be expected to pay taxes for the clothes on their backs! Gimme a break!
The term "revenue neutral" applies to the government and not the tax payer. No tax is revenue neutral to the tax payer. Income tax is collected in the same manner as GST (paid at source and clawed-back) but I don't hear businesses expressing concern over that. Or is it because business, as a rule, pays no income tax at source?
Sorry, it costs money to run our country on a daily basis and the feds can't wait to be paid on an annual basis, much like you or I. I have no qualms about paying my fair share of tax. I hear the rumblings of discontent over taxes and wonder where we would be without the funds made available to our various levels of government. Where would education and healthcare be then? How would goods be moved from point A to B without the roads or rail? Just how will my garbage be disposed of and how can I ensure that my water and food is safe?
Political maneuvering in recent years has done serious damage to our society by pandering to those that want to pay less but demand more in services (tax cuts don't work). Our children's children are in debt before they are born as a result. We are a small population in a huge (geographically) country and we demand all of the luxuries and services that the neighbours next door have. If we are not prepared to pay for it we need to go back to tribal law and living in caves.
Bill
I would be much more in favour of seeing certain other services withdrawn from taxable status before those. Shouldn't basic necessities be more valid as tax-free before those that you have hi-lighted (ie clothing, personal hygiene items, etc)? The services you feel should be tax free are often limited to those that have the means to afford them. A person making minimum wage often can't afford a lawyer or real estate but they should be expected to pay taxes for the clothes on their backs! Gimme a break!
The term "revenue neutral" applies to the government and not the tax payer. No tax is revenue neutral to the tax payer. Income tax is collected in the same manner as GST (paid at source and clawed-back) but I don't hear businesses expressing concern over that. Or is it because business, as a rule, pays no income tax at source?
Sorry, it costs money to run our country on a daily basis and the feds can't wait to be paid on an annual basis, much like you or I. I have no qualms about paying my fair share of tax. I hear the rumblings of discontent over taxes and wonder where we would be without the funds made available to our various levels of government. Where would education and healthcare be then? How would goods be moved from point A to B without the roads or rail? Just how will my garbage be disposed of and how can I ensure that my water and food is safe?
Political maneuvering in recent years has done serious damage to our society by pandering to those that want to pay less but demand more in services (tax cuts don't work). Our children's children are in debt before they are born as a result. We are a small population in a huge (geographically) country and we demand all of the luxuries and services that the neighbours next door have. If we are not prepared to pay for it we need to go back to tribal law and living in caves.
Bill
Malcolm, one point I missed.
I have 25 years of my life invested in the manufacturing sector prior to leaving the 9-5 world. My issue with manufacturing or distribution is a predominant unwillingness to contribute to our society while raping it for all it can. Corporate deadbeats are plentiful in Canada and, while this isn't new, it should be a concern for all Canadians.
Industry's greatest concern in Canada is the return to investors and making anything more than a PR or token contribution to our society is a very distant second. It is legitimate for all in Canada to minimize the taxes you pay but the recent trend of industry to "bully" their way to greater profits is really disturbing. There are plenty of examples of industry warning of closures or moving if they don't get what they want.
It would be really refreshing to see one large business in Canada quit the PR spending and spinning and actually pay their taxes for a change.
I have 25 years of my life invested in the manufacturing sector prior to leaving the 9-5 world. My issue with manufacturing or distribution is a predominant unwillingness to contribute to our society while raping it for all it can. Corporate deadbeats are plentiful in Canada and, while this isn't new, it should be a concern for all Canadians.
Industry's greatest concern in Canada is the return to investors and making anything more than a PR or token contribution to our society is a very distant second. It is legitimate for all in Canada to minimize the taxes you pay but the recent trend of industry to "bully" their way to greater profits is really disturbing. There are plenty of examples of industry warning of closures or moving if they don't get what they want.
It would be really refreshing to see one large business in Canada quit the PR spending and spinning and actually pay their taxes for a change.
"Farmers get money for mad cow, TO gets money for SARS, BC gets money for fires - shouldn't exporters (the backbone of the Canadian economy) get some help too?"
If they do and, as you say, they are the backbone of the Canadian economy, who is left to pay the bills?
Bill
If they do and, as you say, they are the backbone of the Canadian economy, who is left to pay the bills?
Bill
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