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

City contractors demolish Memorial Park washrooms

Facility expected to be complete by January

South Surrey girls find sweet success

Strong-willed friends impress judges at cooking competition

Eight arrested in Surrey following fraud investigation by RCMP

Police probe focused on residence in the 18900-block of 64th Avenue

Wake Up Surrey tackling gang violence with three summer programs

Group also plans unveil ‘one year action plan’ at City Hall today

UPDATE: Missing Delta man’s body found in Alice Lake

Alice Lake closed until further notice, campground remains open

VIDEO: B.C.’s ‘unicycle cowboy’ aspires to be rancher one day

Burklan Johnson has only ridden a horse once, but this unicyclist has big plans to become a cowboy.

Fireworks and fires over a half-metre banned Friday in Kamloops centre

B.C. Wildfire Service banning to category 2 and 3 fires in Kamloops Fire Centre at noon Friday

Rescued Oregon family simply unprepared for adventure, RCMP say

Agencies now helping the group of four get to their destination in Alaska

Large B.C. tree dies after possible poisoning

Police and District investigate after large chestnut tree’s rapid decline

Canucks release 2018-19 season schedule

Vancouver to face Calgary Flames on Wednesday, Oct. 3, for home opener

VIDEO: Luxury Home and Design Show opens with Italian flare

Event set to run Friday to Sunday at BC Place in Vancouver

Small new charge on BC Hydro bills goes toward new crisis fund

The new fund aims to help customers who find themselves in financial emergencies

UPDATED: Crown appeals B.C. polygamous leader’s acquittal in child bride case

James Oler had been charged with taking his underage daughter to the U.S. to marry her off

South of the Fraser condo flipping increased as market heated up

Local realtors say investors were re-selling through assignment sales, but the trend may reverse.

Most Read