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

Video: Sicamous Museum gifted with model of historic CP Rail hotel

Calgary family with ties to the area commissioned intricate model for museum

Top women’s hockey player Natalie Spooner coming to the Okanagan

Natalie Spooner special guest at annual Grindstone Award Foundation charity weekend in Kelowna

Crash disrupts Highway 1 traffic west of Chase

Reports indicate crash took place near Planter Road intersection

Firefighters respond to bus fire on Highway 1

Smoke in coach bus reported to have been caused by overheating, driver and passengers safe

Update: Washed out South Okanagan road temporarily closed for assessment

A portion of Eastside Road, south of Penticton, appears to be crumbling into Skaha Lake

‘Teams that win are tight’: B.C. Lions search for chemistry at training camp

The Lions added more than 50 new faces over the off-season, from coaching staff to key players

Growing wildfire prompts evacuation of High Level, Alta.

Chuckegg Creek fire has been burning for several day, but grew substantially Sunday

Our history in pictures: Early four-way stop in Salmon Arm

This photo was taken at the four-way stop where Wharf Road intersects… Continue reading

Column: Parallel parking surveys and precedent

In Plain View by Lachlan Labere

Woman in hospital after being thrown off horse

She was airlifted to Kelowna General Hospital from Okanagan Falls

Okanagan art gallery releases their theme

Fine arts painting will be the point of focus for this year’s event

South Okanagan search and rescue help injured climber

Search and rescue called on the assistance of a helicopter to help retrieve an injured hiker

Okanagan nature centre fundraiser goes western

Allan Brook’s Nature Centre Wine and Wild West Fundraiser is on July 6

Marriage proposal on the big screen at Enderby drive-in

Kelowna man gets engaged in front of hundreds to Vernon sweetheart

Most Read