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HST – Preparing for July 1, 2010

June 7, 2010

Preparation is key to reaping rewards and avoiding pitfalls as the implementation of the harmonized sales tax (HST) in Ontario and British Columbia looms, according to a veteran tax expert.

“Worries are not non-extistent, but they are small compared to the relative benefits,” said Peter Budreski, chartered accountant and consultant to small and mid-sized firms.

He said preparing for the transition will greatly reduce the pain of the change and position small and mid-sized firms to reap the rewards of HST.

For instance, businesses must make sure their tax software tools have been patched or updated to accommodate the HST, said Budreski. In Ontario for instance, the government has earmarked $400 million for accounting software replacement assistance to SMBs, he noted.

On July 1, 2010, the goods and services tax (GST) and the provincial sales tax (PST) will be merged into the HST in Ontario and BC.

The Ontario government claims the move will save businesses $500 million annually in compliance costs. When fully implemented, the HST will save $4.5 billion annually.

Budreski, who also helps owners of small and mid-sized companies set up their QuickBooks accounting software, said the transition will generally mean less cost and complication for many of these firms, although many consumers might cry foul.

“There will probably be a backlash from consumers who will feel they are going to be charged more taxes over a wider range of products,” he said

Source:  Article from http://www.itbusiness.ca/it/client/en/home/News.asp?id=56777

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