When the clock struck 2008 a few days ago, the much vaunted
GST cut officially took effect in Canada, with the hated tax reduced from six per cent down to five. But are you getting what's not supposed to be coming to you?
Experts are warning consumers to check their receipts when they make a purchase over the next few weeks to ensure they're not being charged more than they should be. Retailers have known about the cut since October, but it couldn't have kicked in at a worse time - right at the tail end of the Christmas and Boxing Day season.
And because of the crunch, the holidays and the one-day turnover, there are fears that many still haven't officially made the switch and are still calculating the old rate at their tills. So experts are advising you to take an extra look at your bill before you leave the store.
The problem stems from the fact that cash registers and computer systems need to be adjusted to compensate for the new rate, and that takes time, effort and some money on the part of merchants. So some have simply delayed the inevitable to your disadvantage.
"It's about 60 plus per cent always, always over the years," estimates Margarita Donovan of the number of businesses that wait. She runs a B.C.-based firm that helps retailers through changes like this, and her phone system crashed last week because of all the calls for help from those who hadn't made the switch. "They do leave it to the last minute," she admits.
"This is the busiest time of the year, through Christmas and into the New Year's Day, especially with returns," adds Derek Nyghbor of the
Retail Council of Canada. "There's a big part of not only point-of-sale technical work that needs to be done, but also training staff." All of which leads to a new dilemma - should returns on Christmas gifts purchased at six per cent GST be given at the old rate or the new one?
All this is a classic case of history repeating itself. The last GST cut - from seven to six per cent - took place in 2006, but that one
occurred in July, long after the Christmas rush. And the same types of complaints were heard back then. Retailers gain nothing by charging you the extra tax - it all has to be given to the government no matter how much it is.
"Consumers should be careful to ensure they're paying the five per cent now," warns John Williamson of the
Canadian Taxpayers Federation. "There's no point in businesses collecting six per cent thinking they're going to gain a percentage of their sales (through a higher tax)."
The experts don't believe this problem will linger long and suspect just about everyone will be up-to-date within the next two weeks. And while one per cent isn't much, depending on what you're buying, it can add up. So keep an eye on what comes out of that cash register. Because the tale of this tape shouldn't have you spending more than you need to.