Consumers will likely be paying more at restaurants and for services such as haircuts and accounting when B.C. adopts a harmonized sales tax next July. Under the harmonized tax regime, announced Thursday by the provincial government, the five-per-cent federal goods and services tax will be combined with the province’s seven-per-cent provincial sales tax into a 12-per-cent harmonized tax.

The added costs to consumers come from the fact the new tax will apply to the same goods and services that the GST applies to, and that includes many items that were not subject to PST. For example, restaurant meals, excluding alcohol, have not been subject to PST, but will be subject to the new HST. So will the purchase of such things as bicycles, school supplies, and non-prescription medicines.

The news is especially grim for the restaurant industry, which is already seeing business down because of the drop in tourism, said Mark von Schellwitz, regional vice-president for the Canadian Restaurant and Foodservices Association.

Read the full article by Fiona Anderson “You’ll pay more for haircuts, meals and school supplies” in the Vancouver Sun (July 24, 2009).

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