The GST/HST: Creating an Integrated Sales Tax in a Federal Country
Canada 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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| Length: | 33 pages |
| Date of creation: | 17 Apr 2012 |
| Handle: | RePEc:ays:ispwps:paper1221 |
| Contact details of provider: | Phone: 404-413-0235 Fax: 404-413-0244 Web page: http://aysps.gsu.edu/isp/index.html
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References listed on IDEAS
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- Bird,Richard & Gendron,Pierre-Pascal, 2011.
"The VAT in Developing and Transitional Countries,"
Cambridge Books,
Cambridge University Press, number 9781107401440, December.
- Bird,Richard & Gendron,Pierre-Pascal, 2007. "The VAT in Developing and Transitional Countries," Cambridge Books, Cambridge University Press, number 9780521877657, December.
- Bird, Richard M. & Mintz, Jack M. & Wilson, Thomas A., 2006. "Coordinating Federal and Provincial Sales Taxes: Lessons From the Canadian Experience," National Tax Journal, National Tax Association, vol. 59(4), pages 889-903, December.
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- Looney, Adam & Kroft, Kory & Chetty, Raj, 2009. "Salience and Taxation: Theory and Evidence," Scholarly Articles 9748525, Harvard University Department of Economics.
- Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and taxation: theory and evidence," Finance and Economics Discussion Series 2009-11, Board of Governors of the Federal Reserve System (U.S.).
- Chun-Yan Kuo & Thomas Mcgirr & Satya Poddar, 1988. "Measuring the Non-Neutralities of Sales and Excise Taxes in Canada," Development Discussion Papers 1988-08, JDI Executive Programs.
- Grady, Patrick, 1990. "An Analysis of the Distributional Impact of the Goods and Services Tax," MPRA Paper 13144, University Library of Munich, Germany.
- Keen, Michael & Lockwood, Ben, 2006. "Is the VAT a Money Machine?," National Tax Journal, National Tax Association, vol. 59(4), pages 905-928, December. Full references (including those not matched with items on IDEAS)
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