Nobody likes paying tax. However, most citizens understand the necessity for reasonable taxation to support important public services, like healthcare, education, and infrastructure. While taxation takes many forms, the two major types of taxes in Saskatchewan are income tax and sales tax.
Much like the 5% federal GST, Saskatchewan’s Provincial Sales Tax, also at 5%, is a retail tax on the consumption of goods and services. Many economists are of the opinion that taxation of consumption is more fair than taxation of income alone, since it targets what people spend, rather than what they earn, save or invest.
You might think that the application of the Provincial Sales Tax is simple, like the GST; a tax on the purchase of all goods and services? Not so much. In addition to the 30-page Provincial Sales Tax Act, there have been 72 “Sales Tax Bulletins” and 135 “Rulings” published by the Ministry of Finance that outline, in painstakingly specific detail, a myriad of exceptions and rules of when the tax does or does not apply. For example, atlases are exempt, maps are taxable. Some of these exceptions, like that on food, make sense. In this case, based on the argument that the very basic necessities of living should not be subject to tax. Most other exceptions however only serve to complicate what should be a simple and fair consumption-based tax.
A Liberal government should commit to a full review and overhaul of the Provincial Sales Tax Act with the aim of simplifying and modernizing administration of the PST, and greatly reduce the number of exemptions to only the most basic to ensure fair application and clear understanding of the tax among both businesses and consumers. Additionally, much like the GST, a system of input tax credits should be considered to ensure PST is applied only at final point of sale.
P.S. We are asking Saskatchewan Liberal Party members to share their views as we shape our party’s platform for the next election. We welcome your comments on our Facebook page, or by emailing firstname.lastname@example.org