Sales Tax in Canada are of three types. The three different types of sales tax in Canada include Harmonized Sales Tax or HST, Provincial Sales Tax or PST and Goods And Services Tax or GST.
But there are exceptions. As for example, Alberta is a province, which does not implement Harmonized Sales Tax and Provincial Sales Tax. On the other hand, Regional Sales Tax do not prevail in Northwestern territories, Yukon territory and Nunavut.
Harmonized Sales Tax- the namesake:
In some provinces, the harmonized sales tax or the HST denotes a combination of the provincial sales tax as well as the goods and services tax into one single sales tax. A 14 percent harmonized sales tax is levied on income of individuals residing in Nova Scotia, New Brunswick and New Found land. The Canada Revenue Agency is responsible for collecting the harmonized sales tax in Canada.
The Canadian Government under the leadership of Grant Devine, brought about harmonization of the Goods and services tax and provincial sales tax in Canada. This measure was taken by the government to make the tax collection system much simpler for the people of Canada. The harmonized sales tax in Canada was not very popular among the citizens. It was looked up on as a step taken by the government to grab taxes.
In order to make the new tax appealing to the public, the sales tax in Canada was lowered to 8%. In the year 2006, the tax rate was further lowered to 6 percent. Owing to some taxes being included in some regions and few others being exempted from some regions, a lot of confusions was generated among people. This also created a lot of confusion between the federal government as well as the governments at the provincial level.
Provincial sales tax in Canada:
Prince Edward Island, Saskatchewan, Quebec, Ontario, Manitoba, British Columbia are some of the provinces where provincial sales tax or the PST is separately collected. But, the commodities to be taxed or exempted differs from one province to another.
Facts about sales tax in Canada:
- PST or provincial sales tax is not prevalent in Alberta.
- In British Columbia, PST is known as Social Security Tax. Tax is levied on alcohol at the rate of 10 percent.
- In Saskatchewan, a 10 percent tax is imposed on consumption of liquor.
- In Prince Edward Island, the provincial sales tax rate is 10 percent. The federal sales tax rate applicable, is approximately, 6 percent.
- In Ontario, provincial sales tax rate is approximately 8 percent.
- In Quebec, provincial sales tax rate is approximately, 7.5 percent.