Soft drinks are exempted from provincial sales tax along with other grocery store items. (Wikimedia Commons)

Extend sales tax to soft drinks, B.C. advisory group says

Province not extending PST, or scrapping homeowners grant

A B.C. government tax fairness advisory panel has recommended extending provincial sales tax to all non-alcoholic beverages except for milk and plain water.

The task force, set up to look at alternatives to Medical Services Plan premiums, also recommends eliminating the homeowner grant and replacing it with a refundable tax credit.

The report, completed in March, was released Thursday by the finance ministry without comment on the recommendations. It says soft drinks should never have been exempted from PST along with the rest of foods, because they have little nutritional value.

The report also recommends introducing a “value added tax” similar to the harmonized sales tax that was rejected in a province-wide referendum.

The finance ministry issued a statement Thursday saying that the drinks tax, changes to the homeowner grant or changing the PST to make it similar to the harmonized sales tax are not being considered.

The task force noted in its interim report that a payroll tax to replace MSP premiums would affect business competitiveness. Finance Minister Carole James has moved to implement the payroll tax next January, while cutting MSP premiums by half at the same time.

The report calls the homeowner grant for property taxes a “regressive feature of the tax system that is fundamentally unfair and would be improved by using the income system to provide more progressive tax relief to homeowners and renters.”

It recommends an enhanced sales tax credit and carbon tax credit for lower income people, funded by the revenue from extending PST to most non-alcoholic beverages.

The report was produced by University of Victoria professor Lindsay Tedds, UBC professor David Duff and former NDP finance minister Paul Ramsey. The task force was set up last fall to find ways to replace government revenues lost due to eliminating MSP premiums. That was pre-empted by James’ February budget, which imposed a payroll tax.

The “employers health tax” takes effect in 2019 at 1.95 per cent of payroll for businesses and organizations with payrolls of more than $1.5 million. A lower rate applies for payrolls between $500,000 and $1.5 million, and those below $500,000 are exempt.

The payroll tax applies whether employers pay their employees’ MSP premiums or not. James emphasized that while property taxes may go up, individuals stand to save $800 a year or more if they have been paying their own MSP premiums.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

Just Posted

Sisters share exhibit in Qualicum Beach

From gnomes and fairytales to trees and texture, but plenty of connections between pair

Parksville council disagrees over parkland, payment

Developer planned to provide 0.5 ha. of land

Rodeo returns to Coombs for fourth year

Events include saddle, bareback riding and barrel racing

Model trains, historical exhibits offered at Parksville museum’s Railway Days

The family-friendly event takes place on Aug. 17 and 18 and is by donation

Coombs, Errington area director won’t run again

Julian Fell endorses Leanne Salter for role

Kim XO is Black Press Media’s fashionista

Starting Sept. 7, stylist Kim XO will host Fashion Fridays on the Life channel on Black Press Meida

Whole city of Kimberley on an evacuation alert due to wildfires

Residents woke up Friday morning being told to get ready to leave any moment

Feds to allow charities to engage in political, but not partisan, activity

The plan is to allow charities to pursue political activities

Trump suggests Canada has been sidelined from latest NAFTA negotiations

Canadian officials have insisted they’re unfazed by being left out of the discussions

B.C. judge who cried during a victim statement to rule on recusing herself

The judge will decide if she’ll disqualify herself from sentencing a man for sexual assault

Photographer files complaint with police after alleged assault on the job

Toronto photographer says he was attacked while covering a protest

Happy birthday Boler: An anniversary gathering of the cutest campers in Winnipeg

Hundreds of the unique trailers in Winnipeg to celebrate the 50th anniversary of the Manitoba invention

Publication ban lifted on details about Fredericton shooting that killed 4

Judge lifts publication ban on court documents related to the Fredericton shooting

Minister optimistic after 2 days of Columbia River Treaty negotiations

Canadian and U.S. officials met in Nelson Wednesday and Thursday to discuss future of the treaty

Most Read