Depending on the particular business and its reporting cycles, many will head to the bank Monday and deposit a sizeable cheque for their HST filing.
This past Saturday while out on the town we received a letter on our blackberry from a local businessman. It is printed in today’s Advertiser as an open letter to the Premier. We responded quickly since the issue has been on our mind too – to which we were encouraged to enjoy the Leafs and forget about work for a night. For business people, work doesn’t shut off so easily and let’s face it, the Leafs were hardly inspiring last Saturday.
As the letter on page 25 spells out in clear detail, any suggestion of revenue neutrality and net benefit is tough to find. The fact is business has an incredible challenge with this new tax. The amounts and implications are staggering.
Sure, local stores, manufacturers and service businesses are merely tax collectors in this scheme – money in, money out. But that money comes from consumers of one sort or another and for businesses with payables this month that exceed receipts received, it is a quandary. We have no doubt, as we write this column on a Wednesday morning, that many businesses will be weighing who to pay at month end; the lease, the bank, the taxes, the payroll, suppliers? The list goes on.
As we have suggested to business friends that have similar insights, the tax collector will offset these concerns with a mighty phrase about collecting tax and it being due, regardless whether cash flow will accommodate paying all the bills.
We recall the days when the GST was implemented. There was a period of acclimatization and during that time many businesses suffered getting over the hump. Some didn’t make it.
It is our hope that the HST does not have a similar effect, but with a weak economy it could well be the catalyst for some folks to give up or restructure in order to start fresh.
After two reporting cycles for HST we see a significant increase in the amount passed along. It is troubling, and those concerns are compounded on the home front when the HST is factored in on all purchases. If this gouging would ultimately result in stronger government programs and less debt for future generations it would be far more palatable. But, as happened with the GST, all that did was buy time until the next big idea.
The notion that these taxes would have been better left in the hands of consumers to spend or save is not lost on us. That’s an argument for another day.