The introductory rate of the value added taxes in Canada was 7%. At present the rate is 5%. In Canada the value added taxes are taken along with the sales taxes that are applicable for the particular provinces.
The Harmonized Sales Tax is a combination of goods and services tax and the provincial sales tax. The rate of the goods and services tax is 5% and the provincial sales tax rate is 8%. This means that the total harmonized sales tax collected in the three above mentioned provinces is 13%.
There are certain items that are regarded as being zero rated under the value added taxation system in Canada. The items are basic groceries, outbound transportation, prescription drugs, medical devices and inward transportation. The export of certain goods and services are also regarded as being zero rated. The value added taxes of Canada have helped in the increase of the efficiency of the Canadian economy.