HST in BC
Before July 1, 2010
On most goods purchased in BC there was a 7%
Provincial Sales Tax (PST) and a 5% Federal
General Sales Tax (GST)
Some things like basic groceries had no GST and
no PST charged on them
Others like newspapers, snack foods and taxis
only had the 5% GST charged on them
Businesses paid PST on the things they bought
After July 1, 2010
• The two taxes were merged into a 12%
Harmonized Sales Tax (HST)
• Those things which were not taxed with the
GST or the PST were still not taxed by the HST
• Most of the things which were only taxed by
the 5% GST were taxed with the full 12% HST.
• Businesses did not pay HST on the items they
bought
Benefits
• Having only one system makes it much simpler
for businesses, and saves the provincial
government the hassle of collecting PST
• Tax is only charged once on an item, not at
every step of its production.
– Example: A mill does not have to pay tax on the
logs it buys under the HST
• The federal government gave us 1.6 billion
dollars
Problems
• The tax on many items increased, these include:
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Books
School supplies
Snack food
Basic Cable TV
Household renovations
Taxis
Vitamins
Movie Tickets
MP3s downloaded electronically
Hair styling
Cigarettes
Questions
• Under the PST system a haircut would have a 5% GST
added to it. Under the HST system that same haircut
has a 12% HST added to it. How much more do you
pay on a $15 hair cut?
OLD: 15 x 0.05 = 0.75, you would pay $15.75
NEW: 15 x 0.12 = 1.8, you would pay $16.80
$16.80
-$15.75
$1.05
You pay $1.05 more on a $15 hair cut
Questions
• Under the PST system a movie ticket would
have a 5% GST added to it. Under the HST
system that same haircut has a 12% HST
added to it. How much more do you pay on a
$8 movie ticket?
The difference in the taxes is 12% - 5% = 7%
You will pay 7% more.
You pay $0.56 more on an
$8 x 0.07 = $0.56
$8 movie ticket
Other Percentage Questions
• John sells flowers, he buys them from a
wholesaler and then increases the price 25%
to determine his selling price. This is called a
markup. If John buys some roses at the price
of $1.78 each, how much will he sell each of
them for?
1.78 x 0.25 = 0.445
John will sell the roses at
1.78 + 0.445 = 2.225
$2.23 each