The School of Public Policy Provides Proposals for Change
CALGARY, Feb. 24, 2012 /CNW/ - A paper released today by The School of
Public Policy finds that Canada's GST has become plagued by exemptions,
rebates and rate reductions, and the impact is proving very costly.
Inefficiencies are leading to roughly $39 billion annually in lost
revenues to federal and provincial governments, argues Professor
Michael Smart, the report's author.
Smart's evaluation of value-added taxes among OECD countries places
Canada's GST well below average in terms of efficiency. As such, Smart
recommends a series of base-broadening reforms such as taxing food and
agricultural products and reconsidering exemptions or rebates for
housing and several public services.
By limiting exemptions and broadening the tax base in this way
governments would begin to recapture revenue. This money could then
either be put towards reducing deficits or be passed along to consumers
by way of a reduced GST rate.
"It would be possible to reduce the GST rate in a revenue-neutral
fashion from the current five percent to approximately three percent,"
The study can be found online at www.policyschool.ucalgary.ca/publications.
SOURCE University of Calgary - School of Public Policy
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