TEI requests administrative tolerance for PST audits.

• Position: Tax Executives Institute, provincial sales tax

On March 4, 2013, TEI filed a letter urging the British Columbia Ministry of Finance to formally adopt a policy of administrative tolerance for Provincial Sales Tax (PST) audits during the first year of the "new" tax (the Province moved from the PST to a Harmonized Sales Tax in 2009, but voters approved a referendum in 2011 to return to the PST effective April 1, 2013). The letter was prepared under the aegis of TEI's Canadian Commodity Tax Committee, whose chair is Robert J. Smith of McKesson Canada. Contributing substantially to the development of TEI's comments were Dwaine Arnason of Shaw Communications Inc., Brian A. Moul of BC Hydro & Power Authority, and Michael J. Willis of Lafarge Canada Inc. Daniel B. De Jong of the Institute's legal staff coordinated the development of the Institute's comments.

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Last year residents of British Columbia (BC) approved a referendum to repeal the Harmonized Sales Tax (HST) and reinstate the Provincial Sales Tax (PST). Royal assent was given to the Provincial Sales Tax Act (PST Act) on May 31, 2012, with a re-implementation date of April 1, 2013. On January 10, 2013, Tax Executives Institute (hereinafter TEI or the Institute) submitted a letter to Jordan Goss of your Ministry, commenting on the administrative aspects of the PST Act and more specifically on the guidance included in PST Bulletin 002, Charging, Collecting and Remitting PST (October 2012). We appreciate the response provided by the Ministry on January 30, 2013. Still, the Regulations containing critical rules necessary for businesses applying the PST were not issued until March 1, 2013. This letter describes the significant adverse effects for businesses in Canada resulting from the delays associated with the release of crucial PST information. TEI urges the Ministry to adopt a formal policy of administrative tolerance to mitigate the imposition of unwarranted penalties.

TEI is the preeminent association of in-house tax professionals worldwide. The Institute's 7,000 professionals manage the tax affairs of 3,000 of the leading companies across all industry sectors in North America, Europe, and Asia. Canadians constitute ten percent of TEI's membership, with our Canadian members belonging to chapters in Calgary, Montreal, Toronto, and Vancouver, and they must contend daily with the planning and compliance aspects of Canada's business tax laws. Many of our non-Canadian members work for companies with substantial activities in British...