Many businesses are not yet prepared for the PST’s return in four months’ time, a tax specialist said on Wednesday.
“There’s a certain amount of fatigue,” said Mike Boven, a tax specialist with BDO Canada said on Wednesday.
Transition to the HST two years ago was difficult enough, and most businesses were caught off-guard by it, finding that switch to be onerous and costly, Boven said
Yet business operators could see the advantage of a single tax, which helped to spur the switchover.
By the same measure, a majority of business people weren’t in favour of reverting back to the PST, seeing it as a step backwards. And then there was the protracted uncertainty surrounding the referendum.
Yet — as Boven observed — democracy rules, so it’s back to square one.
“I would say there’s been a certain reluctance to jump right in. I think they are just not enthused about jumping into it again. Who can blame them?”
Kamloops Chamber of Commerce held a tax-transition workshop recently where a low turnout may have reflected that mood. The chamber is planning to schedule a second workshop early in the new year, said executive director Deb McClelland.
“We’re trying to help do that so, with preparation, they’re not reacting to change and they’ll be ready for it,” she said.
For new businesses — roughly 30,000 have set up since the HST was introduced — the PST/GST is a learning curve and one on which they’re advised to get a firm grasp.
Boven himself admitted that, two years after its disappearance, some of the PST details have faded from memory.
“Every existing business is going to have to brush up on how the new tax works. There’s definitely going to need to be some planning.”
Boven spoke to members of the Canadian Home Builders on the subject Wednesday night and also offered some tips for business in general.
Two key areas to consider are point of sales reprogramming among retailers and careful planning around purchases, he said.
Depending on the type of business, it may be a cost advantage to do a purchase before or after the changeover on April 1, 2013.
In the case of homebuilders and home buyers, contracts that straddle that date should explicitly deal with how the tax will be handled.
“It shouldn’t be overlooked; there may be unintended consequences for people out there.”
Specific rules apply to the two-per-cent transition tax on the sale of newly constructed or substantially renovated homes that will no longer be subject to the HST.
“To a new home buyer, that’s a big deal.”