Harmonize Consumption Taxes to Improve Economic Efficiency
Briefing by
Sabrina Browarski
,
Glen Hodgson
April 2008, Source: The Conference Board of Canada, 9 pages
This briefing argues that creation of a harmonized consumption tax system would reduce business costs and provide a welcome and necessary boost to Canadian productivity growth.
Document Highlights:
In this briefing, The Conference Board of Canada argues in favour of a harmonized tax system. The current situation of having tax regimes operating at cross purposes across the country undermines incentives, acts as a drag on productivity, and adds costs to businesses. A concrete way to improve the efficiency of the tax system would be through harmonization of consumption taxes into a single value-added tax system. Specifically, provinces that have a consumption or sales tax should work with the federal government to harmonize their retail sales tax regimes with the federal GST in order to create a harmonized value-added consumption tax system—ideally at a single rate. Such a system would reduce business costs and provide a welcome and necessary boost to Canadian productivity growth.
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