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Some
of the changes aren't as straightforward as you might
guess.
Take
this example, based on information from tax consultant,
KPMG Canada:
If
you exchange the purple shirt Aunt Maxine gave you at
Christmas for the same shirt in the colour blue on Jan. 2,
are you due a refund on the difference in the GST?
The
answer is yes, although we're talking small change - 30
cents on a $30 shirt.
"If
the shirt is purchased before Jan. 1, 2008 and returned on
or after that date, the GST refund on the returned shirt
will be six per cent. The exchange will be considered a
purchase of a new shirt, which will be taxed at five per
cent because it took place after Dec. 31, 2007,"
according to KPMG.
While
it is true that retailers have just gone through their
busiest season of the year, Derek Nighbor of the Retail
Council of Canada expects things to go smoothly when the
lower tax rate goes into effect.
Retailers
and other types of businesses have already reduced the GST
once. On July 1, 2006, the GST was reduced to six per cent
from seven per cent with relatively few reported problems,
said Nighbor, vice-president of national affairs for the
Retail Council.
"Our
sense is, that as with the first iteration, retailers
large and small will be ready," he said.
"It
is a big chunk of money."
Nighbor
estimates the tax reduction will put $5 billion into the
pockets of consumers.
In
most cases, the GST appears separately on bills for goods
and services, making it relatively easy to see whether you
are getting the reduction you are due.
But
businesses do have the option of including the tax within
their prices. During the last GST reduction, some
businesses chose to increase their prices by an amount
equal to the tax reduction, so the $12 price of a movie
ticket or the $1.50 cost of a vending-machine treat stayed
the same for consumers, but represented a seemingly
painless way to raise prices for the business operator.
The
Canada Revenue Agency has a toll-free GST information line
for consumers and businesses from 8:15 a.m. to 8 p.m.,
Monday through Friday, to answer questions (1-866-959-7797
English, 1-866-959-7798 French). There is also information
for consumers and businesses on the Internet at
www.gst.gc.ca.
Source
: National Post - Toronto, Ontario, Canada, dated
27/12/2007
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