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Posts Tagged ‘HST’

Harmonized Sales Tax & Mutual Fund Investors

Monday, November 23rd, 2009

The Harmonized Sales Tax (HST) is simply the combination of the federal GST and provincial retail sales tax (RST) into one single sales tax, administered by the federal government on the majority of goods and services purchased by  consumers. The stated purpose of the HST is to make businesses more competitive and to achieve cost savings by simplifying the sales tax collection process.

For the past several years, only Nova Scotia, Newfoundland & Labrador and New Brunswick have operated under the HST. Quebec introduced the Quebec Sales Tax (QST) in 1992, which quite closely resembles the HST. In 2009, both Ontario and British Columbia introduced plans to harmonize their respective provincial sales taxes with the federal GST to create an HST, effective July 1, 2010. In Ontario, the new HST would have a combined tax rate of 13 percent and would include the current general Ontario RST rate of 8 percent and the federal GST rate, currently set at 5 percent.*  As a result, a greater proportion of Canadians will be subject to HST. This paper will discuss what harmonization means to consumers and more specifically, how HST will affect your mutual fund investments.

* In British Columbia, the new HST would have a combined tax rate of 12 percent and would include the current B.C. Social Service Tax (SST) of 7 percent and the 5 percent federal GST rate. (more…)

Tags: HST, Investments, Mutual Funds
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