- British Columbia’s Provincial Sales Tax harms business competitiveness and investment
- It imposes high compliance burdens on firms due to its complexity
- The province has the highest marginal effective tax rate on investment in Canada
- Taxing machinery and equipment leads to less investment, lower productivity, and slower economic growth
- Replacing the Provincial Sales Tax with a Harmonized Sales Tax or Value Added Tax would reduce taxes on business inputs
- Eliminating taxes on machinery and equipment could increase capital stock per worker by 6.5%
- This would increase average hourly earnings and annual income per worker
- Switching to a Harmonized Sales Tax has resulted in modest increases in consumer prices
- Reductions in income tax and enhanced sales-tax credits can offset declines in real incomes for households
Source: fraserinstitute.org
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
