A promised return to the standards of the old PST comes with a significant departure as private vehicle buyers will pay the full 12-per-cent tax as of April 1.
This raised a cry of outrage from the city’s chief HST critic, who said the move is further proof the Liberals can’t be trusted.
“We’re still stuck trusting a party that the people have shown they pretty much don’t trust any more,” said Chad Moats, who led the anti-HST campaign in Kamloops-North Thompson.
Under the old system, private buyers paid seven per cent GST on vehicles. That amount went up to the full 14 per cent with the HST.
B.C.’s finance minister introduced a new-and-improved provincial sales tax Monday to replace the HST that was defeated in last year’s fractious referendum.
Kevin Falcon said taxpayers will officially begin paying the old PST in addition to the GST starting April 1.
Falcon said the return to the PST brings back all the old exemptions, meaning consumers will no longer pay seven-per-cent tax on restaurant meals, gym memberships, bicycles, movie tickets and haircuts.
“All the familiar exemptions will be back, bicycles, books and magazines, children’s clothing and footwear, food and dietary supplements, non-alcoholic beverages, used clothing,” he said.
But Kamloops-South Thompson MLA Kevin Krueger said people who buy used vehicles will pay the full 12 per cent, which dealerships have been demanding for years.
By doing this, the province is evening the playing field for everyone, said Krueger.
“It wasn’t deemed fair that dealerships had to collect it and private sellers did not. It’s important to government to be fair all around so that will remain,” he said.
Moats said this is a prime example of how the Liberals can’t be trusted. If the rules are now different for private vehicle sales, then more exemptions could be jettisoned.
“They’re already starting to play games,” he said.
Blair Qualey, president of the New Car Dealers Association of B.C., applauded the government’s move. He said automotive dealers have wanted this since before the GST was introduced in the 1990s.
“It shouldn’t matter where you buy a vehicle as to how much tax you pay,” he said.
He said the Liberals announced in February’s budget that the tax would continue past the demise of the HST, so no one should be surprised.
Falcon has never been a fan of the PST, having once called it a stupid tax. When asked Monday if this version is an improvement, he responded: “Yes. It’s better-stupid.”
Moats said it would be nice if the finance minister stopped insulting British Columbians.
“It’s the second time in less than a year that Falcon’s called the voters of B.C. stupid,” he said. “Isn’t there a better way to communicate?”
Locally, business owners and restaurateurs aren’t anticipating a huge spike in sales once the PST/GST is back. Kevin Strukoff, manager of Spoke ‘n Motion said his store didn’t take as a big a hit under the HST as he anticipated.
But he expects people might be encouraged to buy more expensive items, saying the 14-per-cent tax on a $1,000 bike was significant.
Bryce Herman, chair the local chapter of the B.C. Restaurant and Foodservices Association, said the damage to his industry has already been done.
“I’m not sure that dropping off a tax is going to mean that people are going to start going out more,” he said. “I think this is too little too late.”
Falcon said the government will conduct business outreach seminars this fall to help businesses familiarize themselves with the return to the PST.