Why is the existing Retail Sales Tax costly?
Businesses and consumers find the retail portion of the sales tax “embedded” in such purchases that businesses make as raw materials, vehicles, fuel, building materials, computers, furniture, equipment, computers, telecommunications and so on. The sales tax is said to be “embedded” because there is often no practical way for any of the retail sales tax paid on something purchased in the act of doing business to be credited against the tax collected when a sale is made. So taxes that can’t be “flowed through” become embedded in the price of the product, which makes it more expensive than it should be. The bottom line is that a lot of things are going to get cheaper, without Ontario’s hard-pressed businesses having to give away their already-slim margins.
