Provincial sales tax and GST harmonization.

• Position: Goods and services tax - Tax Executives Institute

On October 11, 1994, Tax Executives Institute submitted letters to the ministers of finance for all Provinces in Canada, which urged the ministers to continue meeting with representatives of the federal government in the ongoing dialogue concerning alternative taxes to replace Canada's Goods and Services Tax (GST). The letters from TEI President Linda B. Burke reminded the provincial ministers of the enormous administrative and compliance costs associated with maintaining separate provincial retail sales tax systems and urged them to move toward the adoption of consumption tax systems that were fully harmonized with the federal GST. The letters were prepared under the aegis of the Institute's Canadian Commodity Tax Committee, whose chair is Pierre M. Bocti of Hewlett-Packard (Canada) Limited. A representative letter is reprinted below.

In June, following its review of Canada's Goods and Services Tax (GST), the House of Commons Standing Committee on Finance released its report containing numerous recommendations for improving the administration of, and compliance with, the GST or alternative form of consumption tax. Tax Executives Institute, Inc. (TEI) welcomed the Standing Committee's comprehensive study of the GST and submitted numerous comments for its consideration. (A copy of TEI's submission to the Standing Committee is enclosed for your consideration.) Since the issuance of the Committee's report, federal and provincial finance and revenue officials have engaged in numerous discussions to explore ways to implement the Committee's findings and recommendations. We write to express our support for the continuing consultations and to urge that the provincial government embrace as a guiding principle--as did the Standing Committee--harmonization of the federal and provincial consumption tax systems.

Background

Tax Executives Institute, Inc. is an international organization of approximately 5,000 professionals who are responsible--in an executive, administrative, or managerial capacity--for the tax affairs of the corporations and other businesses by which they are employed. TEI's members represent more than 2,800 of the leading corporations in Canada and the United States. Canadians make up approximately 10 percent of TEI's membership, with our Canadian members belonging to chapters in Calgary, Montreal, Toronto, and Vancouver, which together make up one of our nine geographic regions. In addition, a substantial number of our U.S. members...