Sunday June 27, 2010
Helpful Handouts Gone With The PST
Small business stung by loss of commission dollars
t's crunch time for the HST which kicks in July 1 and small businesses are scrambling to start collecting it. The provincial government commission cheques that helped pay the costs associated with collecting and remitting the now-defunct PST will not be there for the HST. Cheque amounts varied depending on Ma and Pa's business revenues but on
Under the now-defunct PST system, the provincial government realized that it took business owners extra time and resources to administer the tax. To decrease the burden on the little guys, Victoria cut an annual commission cheque to individual businesses. Cheque amounts varied depending on business revenues, but on average were about $2400.
When the HST begins, businesses lose that money and meanwhile the provincial government is still getting it's cash but they don't have to cough up those commission cheques any longer and to make matters worse the feds haven't got any plans in place to compensate small business for their time either.
While speaking on CKNW Friday, Brian Bonney, Director of Provincial Affairs for the BC Federation of Independent Business Association (FIBA) said that the system needs to be amended to include the compensation money.
Bonney said with the PST, they lobbied for the commission cheques and have plans to pressure both the federal government and provincial government to come up with a compensation package of some kind for small business.
"The government needs to do something about it and what we need the province of BC to do is lobby the federal government on bringing in what we refer to as a Taxpayers Fairness and Services Code," said Bonney.
Combining the two taxes does mean that paperwork and banking is now cut in half and people will spend less time burning the midnight oil doing remittance forms in duplicate. But doing the singular tax still takes time and resources.
Small business, companies with less than 5 employees, are the backbone of the economy. Ma and Pa stores and services supply employment to 56-per-cent of the private workforce and they will be doing over 60-per-cent of the new hiring in the province this year.
If businesses had any questions about the PST they could always refer to the 1000-page document from the Canada Revenue Agency which was difficult to understand and rife with legalese. When people called with questions, quite often agents provided the wrong information. Businesses did what they were told to do and in many cases due to the misinformation, they ended up being fined and penalized.
So the FIBA urged business owners to get their answers in writing then the agency can't come back on the business owner and charge the fines and penalties. To avoid more communication problems, the provincial government developed a simpler modus operandi;
a) It took the legalese from the thousand-page document people had to wade through and "plain-languaged" it, making it so the average small business owner could understand it.
b) It gave the rights to a small business to ask for information and answers to tax questions in writing.
Under the HST, the federal government doesn't provide hard copy answers to people's questions and that is bound to cause more needless hardship.
For more information visit www.cfib.ca
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