British Columbia’s recent budget implementation has brought about changes to the province’s sales tax regulations, impacting various professional services that were previously exempt from PST collection, such as accounting, architectural, engineering, and security services. This move has raised concerns among small businesses, with the Canadian Federation of Independent Business (CFIB) expressing disapproval.
Kalith Nanayakkara, a senior policy analyst at CFIB, voiced concerns regarding the increased tax burden on small businesses amidst existing cost pressures. Instead of alleviating taxes on capital investments as advocated by the business community, the expansion of PST is viewed as a setback.
Nanayakkara emphasized the negative impact on local businesses and the economy, stating that the tax expansion will lead to higher costs for consumers, potentially deterring support for local businesses. Despite the provincial government justifying the alignment with other provinces’ tax structures, the move has sparked criticism over its potential repercussions.
Moreover, the government’s introduction of a new 15% manufacturing and processing investment tax credit aims to stimulate business investments in manufacturing sectors. However, the overall sentiment remains skeptical, as the focus shifts towards the implications of the expanded sales tax base on small businesses and the economy.