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VICTORIA – Finance Minister Gary Collins today announced a reduction in the provincial sales tax rate to 7 per cent from 7.5 per cent.
“Our plan to balance the budget and revitalize the economy is working and I am extremely pleased that we are now able to reduce the provincial sales tax,” said Collins. “Since we made the difficult decision 2 ˝ years ago to increase the rate to cover additional compensation for health care professionals, British Columbians have consistently and overwhelmingly told us that reducing the sales tax should be a top priority when the changes we were making began to pay dividends. That time is now.”
The Social Service Tax rate was increased by half a percentage point in the Feb. 2002 Budget to help fund nearly $800 million in higher compensation costs for health professionals, including increased costs for recruiting and retaining in-demand doctors and nurses in British Columbia.
The reduction to 7 per cent will add $270 million back into the pockets of British Columbians each year and further enhance the competitiveness of B.C. businesses.
Government also announced that the B.C. refundable sales tax credit, which was increased to $75 from $50 in 2002 to protect low-income British Columbians, would remain at the higher $75 level.
“All British Columbians worked hard to balance our budget and create a stronger economy,” said Collins. “We can now see the results of that hard work: robust economic growth, solid job creation, thriving resource industries, a booming housing market, and stronger retail sales. With healthy and growing surpluses, we now have more opportunities to make British Columbia even better.”
The reduction in the Social Service Tax rate takes effect Oct. 21, 2004. -30- For details of the tax rate reduction visit http://www.rev.gov.bc.ca/ctb/Transition.htm online.
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