Ontario Should Scrap Retail Sales Tax, Replace with Value-Added Tax: C.D. Howe Institute



    TORONTO, Sept. 16 /CNW/ - Ontario should scrap its outdated retail sales
tax (RST) and opt for a made-in-Ontario valued-added tax (VAT) to improve
fairness, encourage investment and reduce government and business costs, says
a report written by Peter Dungan, Jack Mintz, Finn Poschmann and Thomas Wilson
for the C.D. Howe Institute.
    The study, Growth-Oriented Sales Tax Reform for Ontario: Replacing the
Retail Sales Tax with a 7.5 Percent Value-Added Tax, notes Ontario is one of
five hold-out provinces with outdated RSTs. The authors examine the best road
forward for Ontario and make the case for a made-in-Ontario value-added tax
(VAT) that would reduce distortions caused by the existing sales tax,
encourage investment, improve fairness, and help to reduce compliance and
administrative costs associated with tax collection. Their research suggests a
7.5 percent Ontario VAT would substantially eliminate the sales tax burden on
capital goods and exports, resulting in an increase in real personal income
and labour productivity over the medium term.
    The report is available at LINK
    http://www.cdhowe.org/pdf/Commentary_273.pdf




For further information:

For further information: C.D. Howe Institute, (416) 865-1904; Peter
Dungan, Adjunct Associate Professor, University of Toronto, Director of the
Policy and Economic Analysis Program, Institute for Policy Analysis; Jack
Mintz, Palmer Chair of Public Policy, University of Calgary,
Fellow-in-Residence, C.D. Howe Institute; Finn Poschmann, Director of
Research, C.D. Howe Institute; Thomas Wilson, Professor Emeritus, University
of Toronto, Senior Advisor, Institute for Policy Analysis, Research Fellow,
C.D. Howe Institute


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