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Sunday, September 4, 2011

CTV Ottawa- Businesses brace for impact from B.C.'s HST vote - CTV News

The decision to revoke British Columbia's harmonized sales tax may only be a week old, but some companies are already preparing to cope with the costly effects they will feel due to its removal.

The revocation of the controversial tax is a boon for businesses in the service sector, who saw demand drop under the regime as consumers were forced to pay seven per cent more for everything from a haircut to a hamburger.

But business owners in the goods-producing sector are set to see their profits squeezed when the province converts back to the old provincial sales tax system in 2013.

The HST -- which combined the five per cent government sales tax with the seven per cent provincial portion -- gave businesses input tax credits for the seven per cent PST they pay on investments.

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