Forget the decimals; make the sales tax an even 10 per cent
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Strange as it might seem, I would like to advocate for a Quebec sales tax increase.
As a business person with a sales tax licence, I received notification from Revenu Québec that as of Jan. 1, 2013, the Quebec sales tax will no longer be charged on the federal goods and services tax. That’s the good news — no more tax on the tax.
The notice then says that “to maintain the same level of revenue from the QST, the current QST rate of 9.5 per cent will increase to 9.975 per cent.” As a result, “the total amount of tax on a bill will not change.”
The math might be correct, but this is bureaucracy run amok. Why on Earth would anyone decree a sales tax rate calculated to three decimal places of a per cent? Let’s just make it what it really is – 10 per cent. Then, everyone could easily calculate the taxes in their head. A $100 purchase would have $5 of GST and $10 of QST for a total of $115.
Instead, Quebec is requiring its tax on $100 be calculated as $9.975. Since taxes get rounded up, it becomes $9.98 and the total payable would be $114.98. And once we get rid of the penny next year on cash purchases, this will end up being rounded to an even $115 in any event.
Of course, since Quebec bureaucrats couldn’t make anything simple, their notice kindly says that merchants whose cash registers can’t handle a sales tax rate of three decimal places can use the rate of 9.97 per cent instead. So at those merchants, a $100 purchase would come to $114.97, which for cash purchases after the penny is retired would be rounded down, to $114.95. So that will give us a system with two different rates, depending on where you shop.