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Countdown to GST Reduction

ImageAs of Jan 1, 2008 the Federal Government is reducing the GST from six per cent to five per cent. This will cost the Government about six billion dollars per year, or perhaps a better way to think of it is that it will put six billion dollars per year back into the pockets of Canadians. That is roughly about $200 per person per year.

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Does this get you excited to shop in the new year? Why wait? A lot of stores are already offering to pay the 1% now, rather than let you delay your purchases until the new year. Just remember not to overextend your credit, because income tax is due only a few months after.

If you live close to the US border, like most Canadians do, you have seen about a 20% improvement in our buying power south of the border. Compared to 20%, the GST reduction does not sound so good. And with NAFTA, there are less costs involved in importing goods. If you are making small purchases, you can visit the US for 48 hours and return with up to $400 worth of goods duty free.

Do you realize, that the GST was introduced in January 1, 1991, and was supposed to be a temporary tax to get our deficits under control and also intended to make Canadian manufacturers more competitive. Score one out of two for GST.

One last tip, in January check all your receipts. I am sure you check your receipts normally, but make a point of doing it in January. Not all vendors will have updated their point of sales machines to reduce the tax. Make sure you get your 1% back!

Pat


 
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