Paper Abstract
This is an 8 page paper discussing the Canadian Goods and Services Tax (GST). Since its implementation in January 1991, the Canadian Goods and Services Tax (GST) has been an excessive burden to the consumers, businesses, corporations, financial institutions and the federal government itself. The initial implementation costs because of manufacturer costs associated with new accounting systems alone for example reached an estimated $1 million per taxpayer. The continuing annual administration costs to comply are estimated at around $500,000 per taxpayer in addition to a total cost to small businesses of over $1.2 billion annually. The Tax Executives Institute was hired in 1994 to assess the system and while it admitted that the GST system was better for international business than the previous FST (the federal sales tax system it replaced but was invisible to the consumer), overall the administration of the system should be modified to have a higher threshold for registration (introduced and still at $30,000 for small businesses), a lower tax rate, but with fewer exemptions to decrease administrative costs among others. The government did not implement these recommendations so that in addition to the continued annual burden on tax payers in Canada, according to the budget released in February 2003 the government now has to reimburse several educational and municipal organizations for GST payments retroactive to the year the GST was introduced; an additional cost to the Canadian tax payer which has yet to be determined. Bibliography lists 5 sources.
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