Friday, July 16, 2010

The Chronicles of HST: The Lying, The Bitch, and the Boardroom

HST is the acronym for:

a) Hateful Sales Tax
b) Horrible Sales Tax
c) Hellish Sales Tax
d) Harmonized Sales Tax, in peace and light, like a gift from above, in harmony with the world.

If you answered ANY of the above you would be correct, except for that hippie peace and light crap.  A new Harmonized Sales Tax has been introduced in BC and Ontario on July 1st that rolls our federal and provincial taxes into one harmonized tax (12% and 13% for BC and ON respectively). 

It's not that I'm vehemently opposed to this tax or taxes in general.  If you want to use health services and drive on roads you've got to pay tax, 'cause nothing comes for free.  And I can see the benefits in lower government administration costs and yadda yadda...IN THE LONG RUN.

In the short term, however, it is an administrative nightmare, as I'm sure New Brunswick, Nova Scotia and Newfoundland would attest, as they rolled out this amalgamated tax in 1997.  In theory it sounds easy enough to comply with.  Change the tax rates in your accounting system to reflect the new rates, right?  How hard could that be?

Okay, so we have GST, PST, and HST.  Let's see...we can zero out the PST because we're not charging that in BC anymore. The prairies, territories, PEI and Quebec can stay on GST. Ontario and BC can change to HST.  Oh, BC HST is not the same percent as Ontario and the maritimes. Shoot. I guess we have to create a new tax group for BC; I'll call it BCHST.

Compare tax rates to the list...check check...wait...when did they announce an increase for Nova Scotia?  Everything is so focused on BC and ON, this is the first I've even heard of it. 15%???  Hmm...well, I guess we need a new tax group for NSHST.  Okay, we've got GST, HST, BCHST, NSHST, and USA for our exempt American customers.  Why can't we just have one tax?  Now we go through the list of customers and change the tax codes for the affected provinces.  Oh, and the vendors too. Right. Better to export that list to Excel to make the changes.  Way too many to do manually.  Okay, I think we're ready to roll forward and start invoicing.

WTF??? Aw crap. Stupid system is giving me an error message.  What did I do wrong?  Google Accpac Knowledge help there.  Delete, change, change, delete, change. Still getting an error message.  Aha! These orders were taken prior to July 1st.  I have to change the tax groups manually for all these orders?  Damn. That sucks. Re-enter, change, change, save.  Okay, moving on.  What? The purchase orders won't post now? Grrr.... Oh, I deleted that tax group and changed the name. to re-enter BCHST for all the BC vendors again.  Hey, a good job for the intern!

Lalalalalala...time to file the GST/HST for June.  Enter, enter, typity, typity...what? What is that line? That wasn't there last month. What does that mean? What are these Recaptured Input Tax Credits? Google, google, google some more.  $#!%  Do I have to do that?  Until 2018???  Are we a large business?

"Annual taxable supplies in excess of $10 million"
"Annual taxable sales of over $10,000,000"
"making taxable supplies worth more than $10 million annually"
"(E/F) × (365 – G)"

WTF??? Somebody translate this!  Google, don't let me down!  Ohhhh...annual revenue of $10 million or more.  Why didn't they say so?  Whew. So as long as we don't have revenue over $10M until 2018 I won't have to separate out a percentage of the HST every month. I never thought I would wish for low sales!

Let's see what the government spin doctors said about this HST:

Lower compliance cost.
  Not if you are a large business and have to hire someone just to make sure your RITCs are in compliance.

Lower cost of doing business. Not so I'm working overtime to solve this!

Create new jobs. Not if you work for the provincial sales tax department for the government. Now that it's eliminated, you might be out of a job. Oh wait, there are some jobs opening up in big businesses to make sure RITCs are in order. I guess that would be a new job.

Savings passed on to consumers.  Ahahahahaha...that one's funny. Oh, you're serious? If a business had a choice to lower their prices or post increased profits, which do you think they would choose? And their suppliers won't be lowering their prices either so where are these savings?

Higher wages. Isn't that a bit presumptuous? Aside from minimum wage, isn't that the choice of the business? The business who is creating new jobs and passing savings on to customers will also have oodles of dough to inflate salaries? Okay...if you say so. I wouldn't turn it down.

Funding for health care. Well I certainly hope so! I have to wonder about the statement "Every dollar raised through the HST will be used to fund health services when the HST comes into effect on July 1, 2010".  Every dollar? The whole dollar? Isn't that a bit of hyperbole? I'm sure there are other programs and infrastructure that will benefit as well. Education, perhaps? Since our school boards have had to make cuts to reduce budget deficits this year?

Oh my God. I totally want to become a government spin doctor. I'm really good at Balderdash* and justifying my shopping habits. *Balderdash is a game where the best bullshitter wins.  Your job is to convince the other players that your definition to the word is correct.  I'm not lying.  Really!

Let's just call it like it is: a tax. Call it value-added if you will, but when you lick off the sugary coating it's still just a tax. Don't try to sell it, convince us, or otherwise cajole us. The government is a business, and the business needs more money. They've downsized departments and increased prices like any other business would. This is the part where the CEO gathers us all in the boardroom and says, "If we want to continue our health benefits, road travel, education and security enforcement, we need to make some changes to our efficiency and our sales policies."  And if you want to keep that job, you will pretty much do what he says because he's the boss.  That's just how it is.


Acting Balanced Mom said...

hugs hun! I'm only visiting Ontario for a month and I'm already tired of the HST - what's worse, Ontario rolled out an ECO tax at the same time and 1/2 the stores are screwing that up and charging 10x what they should (or more) on a whole range of products... definitely not simpler now...

Acting Balanced Mom said...

Haven't seen you around much and just wanted to post and hope you are okay!

Miz Dinah said...

I am not dead. I promise. :)