The GST/HST: Creating an Integrated Sales Tax in a Federal Country
Canada is not a country with a reputation for bold experimentation. However, decades of federal-provincial compromises have successfully disproved the belief that an invoice-credit, destination-based value-added tax (VAT) is unworkable at the subnational level. Canada’s experiences with the GST, as...
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| Format: | Article |
| Language: | English |
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University of Calgary
2012-04-01
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| Series: | The School of Public Policy Publications |
| Online Access: | https://journalhosting.ucalgary.ca/index.php/sppp/article/view/42380 |
| _version_ | 1797843926514663424 |
|---|---|
| author | Richard M. Bird |
| author_facet | Richard M. Bird |
| author_sort | Richard M. Bird |
| collection | DOAJ |
| description | Canada is not a country with a reputation for bold experimentation. However, decades of federal-provincial compromises have successfully disproved the belief that an invoice-credit, destination-based value-added tax (VAT) is unworkable at the subnational level. Canada’s experiences with the GST, as well as with subordinate VATs like the HST and independent vats like the QST, have three important and interlinked consequences for future tax reform in Canada. First, the exact shape of provincial-level taxes is largely irrelevant to the smooth functioning of a federal VAT — although lack of provincial-federal coordination inevitably raises administrative costs. Second, the nature of a subordinate sales tax is extremely important at the provincial level. As the furor over British Columbia’s HST demonstrates, governments can’t ignore voters’ views and must retain the freedom to tailor provincial-level taxes to meet them, even when public opinion leads to suboptimal outcomes. And third, the best way Ottawa can avoid such outcomes is to provide the provinces with critical support and encouragement in the form of administrative and economic assistance. Since the federal government controls Canada’s borders, over which imports and exports flow, and administers its own sales tax, there is plenty of scope for cooperation. This paper traces the history of federal sales taxation, from the first turnover tax in 1920 right up the present-day GST, along with comprehensive examinations of regional sales tax issues in every corner of Canada, making it one of the best available summary treatments of the GST. |
| first_indexed | 2024-04-09T17:13:55Z |
| format | Article |
| id | doaj.art-87c3e62d6710462e8b018b65812a97ef |
| institution | Directory Open Access Journal |
| issn | 2560-8312 2560-8320 |
| language | English |
| last_indexed | 2024-04-09T17:13:55Z |
| publishDate | 2012-04-01 |
| publisher | University of Calgary |
| record_format | Article |
| series | The School of Public Policy Publications |
| spelling | doaj.art-87c3e62d6710462e8b018b65812a97ef2023-04-20T04:07:11ZengUniversity of CalgaryThe School of Public Policy Publications2560-83122560-83202012-04-015The GST/HST: Creating an Integrated Sales Tax in a Federal CountryRichard M. Bird0University of TorontoCanada is not a country with a reputation for bold experimentation. However, decades of federal-provincial compromises have successfully disproved the belief that an invoice-credit, destination-based value-added tax (VAT) is unworkable at the subnational level. Canada’s experiences with the GST, as well as with subordinate VATs like the HST and independent vats like the QST, have three important and interlinked consequences for future tax reform in Canada. First, the exact shape of provincial-level taxes is largely irrelevant to the smooth functioning of a federal VAT — although lack of provincial-federal coordination inevitably raises administrative costs. Second, the nature of a subordinate sales tax is extremely important at the provincial level. As the furor over British Columbia’s HST demonstrates, governments can’t ignore voters’ views and must retain the freedom to tailor provincial-level taxes to meet them, even when public opinion leads to suboptimal outcomes. And third, the best way Ottawa can avoid such outcomes is to provide the provinces with critical support and encouragement in the form of administrative and economic assistance. Since the federal government controls Canada’s borders, over which imports and exports flow, and administers its own sales tax, there is plenty of scope for cooperation. This paper traces the history of federal sales taxation, from the first turnover tax in 1920 right up the present-day GST, along with comprehensive examinations of regional sales tax issues in every corner of Canada, making it one of the best available summary treatments of the GST.https://journalhosting.ucalgary.ca/index.php/sppp/article/view/42380 |
| spellingShingle | Richard M. Bird The GST/HST: Creating an Integrated Sales Tax in a Federal Country The School of Public Policy Publications |
| title | The GST/HST: Creating an Integrated Sales Tax in a Federal Country |
| title_full | The GST/HST: Creating an Integrated Sales Tax in a Federal Country |
| title_fullStr | The GST/HST: Creating an Integrated Sales Tax in a Federal Country |
| title_full_unstemmed | The GST/HST: Creating an Integrated Sales Tax in a Federal Country |
| title_short | The GST/HST: Creating an Integrated Sales Tax in a Federal Country |
| title_sort | gst hst creating an integrated sales tax in a federal country |
| url | https://journalhosting.ucalgary.ca/index.php/sppp/article/view/42380 |
| work_keys_str_mv | AT richardmbird thegsthstcreatinganintegratedsalestaxinafederalcountry AT richardmbird gsthstcreatinganintegratedsalestaxinafederalcountry |