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Restoring PST will bring upside, downside, say Comox Valley businesspeople

Government will scrap the harmonized sales tax and restore the provincial sales tax next April.

Government will scrap the harmonized sales tax and restore the provincial sales tax next April, with exemptions for haircuts, restaurant meals, bicycles and movie tickets, among other items, Finance Minister Kevin Falcon said this week. "I think the bulk of our consumers will be happy that they don't have to pay seven per cent on dining out, gym memberships, certain things like they were before," said Tia Otter, president of Comox Business In Action. "I just think it will allow the public to have a little more spending money again. They'll have more disposable income."She also noted the benefit to homebuilders and developers."They won't be hit with a 12 per cent up front," Otter said. "Overall, I think it's a positive move, considering our economy ... For the average household I think it will make things a little more affordable, just putting that seven per cent back in their pockets."Downtown Courtenay Business Improvement Association president Mark Middleton figures it will be two years before we start to fully understand the ramifications of the change."Businesses are going to have to have a year under their belt, I would think, before they can determine whether or not it's beneficial or detrimental," he said. "We're a long ways from seeing any real answers to the question."From a business perspective, Middleton feels the failed HST made life easier and did not add anything extra."We were already charging PST and GST," he said. "Twelve per cent is 12 per cent no matter how you add it up, from my perspective."As he has stated previously, Middleton is inclined to believe the economists who say a harmonized sales tax is economically the best way to go. He also believes the move to revert to the PST was political, not economical."Time will tell if we live to regret the flip-flop or if things are better without the HST," he said. "Unfortunately, the political fallout will take place before we've had enough time to determine whether or not they were right and who was wrong."Tax changes made along with the HST will be maintained, including a 12 per-cent provincial tax on privately sold used cars, making the tax equal to that paid at a car dealership. Tobacco taxes that were increased seven per cent when the HST came in will continue. Liquor taxes will also be adjusted to maintain retail prices.The Province expects to save about $9 million a year in administration costs by using a new online registration and payment system for business. Businesses will need to set up computers to comply, with software expected to cost about $1,000."I think that's way too much to ask for small business particularly, with how we're being impacted the way the economy is," Otter said. "Everybody's hurting already." Low-income families will give up a $230-per-person rebate that was introduced to offset HST costs. As of next April, the PST rebate will resume, paying $75 per single adult with an income of $15,000 or less, and $75 per parent for families with an income of $18,000 or less. According to an independent panel, the end of the HST will mean $520 million less revenue to the B.C. treasury next year, $645 million less in 2014 and increasing lost revenue after that, Falcon said. With fewer dollars coming in, Middleton suggests government either has to cut what it's put out or find another source of revenue to make up the difference. "There's only one taxpayer in the end," he said. "Ultimately it comes back down to the same people. We're paying the taxes one way shape or another."— with a file from Tom Fletcher, Black Pressreporter@comoxvalleyrecord.com