TEI files recommendations with British Columbia's Commission on Tax Competitiveness.

• Position: Canada

On September 29,2016, TEI filed a submission responding to the British Columbia Commission on Tax Competitiveness's call for feedback on how to Improve BC's competitiveness. TEI's submission follows and builds upon its May 2016 liaison meeting with representatives from the BC Ministry of Finance Tax Programs and Tax Policy branches. TEI's principal recommendation for BC to become more competitive and to retain its provincial Independence Is for BC to replace Its current PST with a made-in BC value-added tax. TEI alternatively recommends several administrative and revenue-related changes to BC's provincial sales and carbon taxes. TEI's comments were prepared under the aegis of TEI's Canadian Commodity Tax Committee, whose chair is David Card. Committee member Brian Moul, Committee Vice Chair Carole Levesgue, and Committee Chair David Card coordinated the drafting of the policy statement with TEI Tax Counsel Pilar Mata.

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Each year, members of Tax Executives Institute, Inc.s (TEI) Canadian Commodity Tax Committee (the Committee) meet in Victoria, British Columbia (BC) with representatives from the BC Ministry of Finance (the Ministry) Tax Programs and Tax Policy branches. At these meetings, Committee and Ministry representatives discuss administrative and technical issues relating to the Provincial Sales Tax Act (PSTA), the Motor Fuel Tax Act (MFTA), and the Carbon Tax Act (CTA). Following the meetings, the Committee typically prepares two written submissions; one proposing revenue-neutral "administrative" recommendations and the other proposing recommendations that will impact the revenue generated by the PSTA, MFTA and/or CTA. (1)

Following this year's meeting, the Committee opted to prepare a single submission responding to the Commission on Tax Competitiveness's (the Commission) call for feedback on how to improve BC's competitiveness through changes to the provincial sales tax (PST) and other business taxes. This letter contains TEI's recommendations and is based on some, but not all, of the administrative and revenue-related recommendations made in previous years.

TEI's recommendations focus on business taxes as required by the mandate of the Commission. We have used the term "business" to broadly define the group of taxpayers that are not natural persons (individuals) and that operate on a for-profit or not-for-profit basis to simplify the submission.

The comments and recommendations presented in this letter are not listed in order of importance. TEI welcomes the opportunity to meet with the Commission to discuss these recommendations further.

About Tax Executives Institute, Inc.

TEI is the preeminent association of in-house tax professionals worldwide. Our approximately 7,000 members represent more than 2,800 of the leading corporations in North and South America, Europe, and Asia. Over 850 of TEI's members, approximately 12 percent, reside in Canada and belong to chapters headquartered in Vancouver, Calgary, Montreal, and Toronto. TEI's Canadian members contend daily with the planning and compliance aspects of Canada's business tax laws. In addition, many of TEI's members residing outside of Canada work for companies with substantial activities in BC and Canada. The comments in this letter reflect the views of TEI as a whole but, more particularly, those of our Canadian Commodity Tax constituency.

Recommend Replacing BC's PST with a Made-ln BC Value-Added Tax

TEI's principal recommendation for BC to become more competitive and to retain its provincial independence is for BC to replace its current PST with a made-in BC value-added tax (BC VAT). TEI recommends the BC Consumer Taxation Branch administer the proposed BC VAT.

TEI proposes that the BC VAT be set at a lower rate than the present PST and apply as broadly as the present GST. This combination would enable BC to replace the revenue generated from the PST while not increasing the amount of tax payable by consumers (as the previous HST regime did).

TEI maintains that the proposed BC VAT would decrease administrative costs for government and businesses. Simplification would also...