editorial

It is not the concept of a value-added tax that is flawed, but the way Finance Minister Michael Wilson has chosen to put it into effect that h as cost him th e support of virtually every special interest group in the country as well as th e support of consumers in general.

What is proposed is a highly visible tax, curiously selective in its application and appallingly complicated in its collection. Wilson is expecting the shop keepers of the nation to act as tax collectors, commanding them to ring up on ea ch sale this new federal tax on top of whatever provincial retail sales tax migh t be in effect. For their efforts, these “tax collectors” will be allowed a maxi mum of $600 to offset the added paperwork.

Add to this the maddening prospect of manufacturers, for example, paying the GST for the raw materials used in their production process, then having to apply for reimbursements because they were not the final user of th e product. What a waste of time and effort.

But to say this nightmare would be restricted to shopkeepers is to underestimate the problem. As tax specialists Barry Dent and John Playf air show elsewhere in this issue in the first of four articles they have written for The Northern Miner on the GST and how it will affect the mining industry, prospectors are goi ng to find themselves mired in non-productive paperwork that just doesn’t seem t o make any sense.

To be fair, this ill-conceived scheme is not entirely Wilson’s fault. To a large extent he was forced into this position by those nattering nabobs of petty regionalism, the provincial premiers. It is bad enough that Wilson’s timetable f or implementing the GST was based on the likelihood that the Tories will have to go to the polls a year later. The premiers, however, seemed to have sacrificed a chance at making this tax a workable scheme to their pursuit of the almighty v ote. It’s not that supporting a value-added tax would lose votes, it’s just that “standing up to Ottawa” is a time-proven way to pick up a few.

No one welcomes more taxes, but to the extent that some new form of value-added tax will spread more equitably what has previously been lev ied as the manufa cturers sales tax, a GST is just about inevitable. This proposed scheme by Wilso n, however, cannot be allowed to stand. The sensible solution from both the taxp ayers’ and the business sector’s points of view is for a value- added tax on all goods and services, including food, in order to reduce it substantially from the proposed 9%.

More importantly, it should be blended in with the provincial sales tax and collected in much the same way. Instead of adding a provincial sales tax and the n a federal GST, one levy would include a basic tax established by Ottawa with t he province adding whatever it feels is necessary.

It seems so simple, but when the first ministers meet in November, it’s not likely that they will be able to come to any agreement that will have all taxpay ers’ best interest at heart. After all, the last time all the provincial governm ents and the federal government managed to agree on anything of any substance wa s Meech Lake, and look how far that has progressed.

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