Ditching HST costly for BC businesses
Posted October 4, 2011 12:52 pm.
This article is more than 5 years old.
VANCOUVER (NEWS1130) – BC is stuck with the HST until March of 2013 but the switch back to the old tax system is already a headache. Some companies are being forced to pay again to un-do the upgrades made ahead of the HST’s implementation in July of 2010.
Voters rejected the new tax system in an unprecedented referendum that wrapped up over the summer.
Ernst & Young has been talking to owners and managers about what needs to be done ahead of the switchback to the old tax system. Associate Partner Ken Ghag says they’ve learned that it’s not as easy as switching back to old systems and software.
“They just can’t go back to what they had before because their systems have been upgraded from before. They’ve added new patches to the software, so it’s not just like hitting a switch and going exactly back.”
That means all of that new equipment needs to be changed or adjusted again at the company’s expense. The cost will vary from business-to-business, depending on its size.
But whatever was spent changing to the HST in the first place, Ghag explains owners and managers expect to pay the same amount again.
“They’re thinking it’s going to be very similar, in terms of cost, of going from PST to HST, and then going back. It’s going to be the same cost.”
During the referendum, the provincial government tried to entice voters to keep the HST by promising to lower the tax from 12 per cent to 10 per cent. Fifty-five percent of voters rejected the new tax system.
