Wida Samavi

Wida Samavi

Not joking about hated HST

B.C. returns to PST and GST on April 1 and for a few Maple Ridge businesses the change back can’t come too soon

It’s no joke. The Harmonized Sales Tax will be dead and gone by Monday, when B.C. will return to the Provincial Sales Tax and the federal Goods and Services Tax combination.

The date of passing is April Fool’s Day, and the change back means that afterwards, only the five-per-cent GST will be charged on restaurant tabs, haircuts or skating lessons, the way it was until July 2010, when the HST was introduced.

The change back can’t come too soon for Wida Samavi, at Britz Hair Studio.

“That was a killer, HST at 12 per cent. That was devastating,” Samavi said from her shop on 224th Street.

Samavi said when the HST came in three years ago, she had to lay off a part-time and full-time hair stylist, while three or four other hair shops in Maple Ridge closed in the aftermath.

“I’m hoping and praying that it will change.”

Samavi has run the shop for three years and is already trying to open on Sundays, hoping the return of the PST will sustain the extra day.

Business has been tough, she added.

“People are holding back. People don’t have money.”

Customers ask her how much it costs to get their hair cut without a shampoo.

While shoppers and business owners may be looking forward to the tax change, local accountant Kathi Halpin said not every business needs a Provincial Sales Tax number.

Only those businesses that charge the PST have to register for such a number.

For example, a massage therapist or a hair dresser doesn’t need a PST number because they’re not charging provincial tax on their services.

“A lot of people aren’t going to be collecting the PST from the government.”

Many people are confused over that point.

“If you’re a business, yes, you need a GST number and the GST number is the same as your HST. You don’t need to re-apply [for a new GST number]. But you need to remember to change the [GST] tax from 12 [per cent] to five. “That’s the big thing,” she said.

“I find that there’s some confusion on that.”

Halpin added that the PST is a one-time only tax, charged at the retail level.

The HST, however, was charged at multiple points as value was added to products, with businesses able to claim input tax credits.

“I’m just so disappointed it’s going back. It’s ridiculous. Ninety-five per cent of my clients did not want to convert back. It’s just crazy.”

Halpin said previously that business owners no longer will be able to claim the entire 12-per-cent tax paid for renting their premises and instead can only claim five per cent GST.

When it comes to vehicle and equipment leases, businesses no longer can claim a 12-per-cent HST input tax credit. This will decrease to a five-per-cent GST credit.

From a business point of view, Halpin said the single tax HST was simpler, adding the government at one point announced it would be reducing it to 10 per cent.

Maple Ridge Coun. Corisa Bell led the Fight HST charge in Maple Ridge. That led to the mail-in referendum in summer 2011, which defeated the tax.

The victorious return of the PST will be celebrated with former premier and Fight HST leader Bill Vander Zalm this Sunday in Victoria.

Bell still thinks it was the right thing to do.

“I absolutely do. Small businesses are just so thankful,” she said.

“It seems like everybody is happy. The point of this is that people spoke. Our voices were heard … “

People are starting to realize that they can organize and speak out and that their voices matter in decisions, she added.

Harj Sekhon, though, doesn’t expect the seven-per-cent reduction in sales tax to make much difference at the four Subway restaurants he runs in Maple Ridge and Pitt Meadows.

“I think people are watching their wallets. I think people are battening down the hatches.

World economic events have people spending more carefully and saving, he adds.

“We should be saving money. We can’t always be spending.”

Sekhon favoured the HST, noting that businesses got input tax credits on their costs.

“It actually made us go out and spend more money.”

• Learn more about the switch back to GST and PST.