The GST/HST: Creating an Integrated Sales Tax in a Federal Country
AbstractCanada is not a country with a reputation for bold experimentation. However, Canadian experience demonstrates conclusively that an invoice-credit, destination-based value-added tax (VAT) is workable at the subnational level, with both federal and provincial governments retaining full control over the rates of their sales taxes as well as retaining a surprising degree of policy freedom with respect to the base of the tax. As this paper shows against the background of a concise history of sales taxation in Canada, it has taken decades of federal-provincial negotiations to produce the present substantially integrated national and provincial sales tax system. Moreover, the process not yet complete and the results are far from perfect. Nonetheless, Canada has shown that not only can VATs be introduced at the subnational level but that they can work surprisingly well – at least in a country with an over-riding national VAT.
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Bibliographic InfoPaper provided by International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University in its series International Center for Public Policy Working Paper Series, at AYSPS, GSU with number paper1221.
Length: 33 pages
Date of creation: 17 Apr 2012
Date of revision:
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Web page: http://aysps.gsu.edu/isp/index.html
Canada; VAT; subnational taxes; intergovernmental fiscal relations;
This paper has been announced in the following NEP Reports:
- NEP-ACC-2012-08-23 (Accounting & Auditing)
- NEP-ALL-2012-08-23 (All new papers)
- NEP-PBE-2012-08-23 (Public Economics)
- NEP-PUB-2012-08-23 (Public Finance)
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