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

BC Wildfire crew rescues lost puppies

They were just leaving the Monashee Complex of fires when they found the cutest creatures.

Sparks set to fly in new Okanagan College welding facility

Welding students based in Penticton will now have access to the new, $2.2 million facility

Okanagan’s smoke filled skies toxic to pets

Pet owners should take extra precautions with pets until smoke dissipates

Smoke cancels Super League Penticton, organizers give pros a gift

Super League Penticton organizers decide to send all pro competitors to championship

Smoky skies means stay inside, according to Interior Health

The air quality in the Okanagan is considered a high risk

More smoggy air for the Okanagan

Breathing conditions are improving, though still not ideal

Liberals scrap lottery system for reuniting immigrants with their parents

Lottery for parent sponsorship to be replaced, more applications to be accepted

UPDATED: Mother charged in death of 7-year-old daughter makes first court appearance

Aaliyah Rosa’s 36-year-old mother charged with second degree murder: IHIT

Seasonal cabins threatened by Cool Creek blaze

Fire burning out of control southeast of Princeton

More than a dozen needles found at popular Vernon beach

Five were found by the popular children’s merry-go-round at the Kin Beach playground

BC Wildfire has close eyes on Snowy Mountain wildfire

BC Wildfire has a variety of plans depending how the wildfire near Keremeos changes in coming days

North Okanagan fire halls lend hand to B.C. wildfires

Personnel and equipment deployed north to help battle B.C.’s many blazes

Bear kills off-leash dog in B.C. park

There have been nearly 200 pet or livestock and bear encounters so far this year

Most Read