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TERRACE — Ou with the ofd and in with the vide the. government with billions in extra
new!: That, traditionally, has been the theme of revenue. , -

New Year celebrations. This time the role of the And for that reason, like it or not, we are pro-
Father Time was played by the Federal Sales Tax

bably going to have to learn to live with it. Past:
(FST) while the Goods and Services Tax (GST). . experience shows governments find endless good
layed the part of the diapered replacement.

.. reasons-for not abandonning what to them are ox
‘What the switch means is the federal govern-

“cellent money-making devices. ge ar
ernit-is replacing four tax retes applying to a Today was the first opportunity most shoppers
pecific fange of products with a single, almost got to assess the effects of the new system. What
across-the-board levy. they should have found was some prices*up,:

The old system included a 19 per cent levy on. others down and still others unchanged.
eutec and tobacco products, a 13.5 per cent

Began Se — ae slte

Did everything unfold as it should have? The

. information on this page attempts to help the

reader answer that question. Unfortunately, there
are two complicating facters.

_. Firstly, the GST Consumer Information Office
‘estimates at bottom right do not take into account
the extra costs incurred by businesses in effective-
ly acting as tax collectors for Ottawa. They are

All those classifications witl now be subet to
GOST, at seven per cent.
"However, the new tax -will also ‘apply to:
“ previouilyjuntaxed ‘services; And that is enough
<n) "hte puta in the eye of any Finance Minister.

"Jt certainly has in the case. of many other coun-.. likely to pass those on to the consumer. .
‘tries where valued-added taxes — GST is simplya Secondly, while GST simplifies the federal sales
: copy. of these -- have been in place for years, «tax by introducing a single, uniform levy, there
«For any government, this is the perfect tax. Its are conditions attached creating three- different
“effects are jnescapable and, because it Is so wide- categories. Each of those and the goods and ser-
anging, a small increase in the tax rate can pro- vices they include are explained below.

| Tax
‘Lites

The consumer does not pay GST. Although the suppliee ,
will have paid the tax, he gets to recover it through a ‘tax
creat, Goods falling under this category are knows as “zer0-
rated,

Basic grocesies, prescription drugs and medical devices are |
the only qualifiers to date.

Ad. the title suggests, the consumer is charged the full seven
per cent. Not suprisingly, this is the longest list and includes
footwear, clothing, household furnishings and appliances,
motor vehicle repairs/ parts and .“personal services’’ such as _
haircuts.

However, since the items were previously untaxed or sub-
ject to federal sales tax at one of the four rates, the effect of

GST on the price to the consumer will vary significantly.

. This category falls between the two above. Although the -
consumer does not pay GST, the effects of the tax are not
- escaped entirely.
That’s because the supplier cannot recover any GST he has
': paid through the tax credit system previously mentioned. It is
therefore anticipated he will pass on the tax he has paid in the
form of higher prices. .
. For example, although your dentist will not be able to
charge GST for filling a tooth, his bill will likely be higher
than before because he'll be recovering the amount of tax [>
paid on the materials he used to do the job.

Rents and child care services fall into this category as weil,

With some exceptions, the cost of tax exempt items will be
higher under GST. :

me-¢ anging face
of grocery shopping

“TERRACE -— When local millilitres is taxable. Unfor-

2? Yesidénts next pay a visit to one tunately the chain sells yogurt in

oo OF the local supermarket chain grams “so we're trying to figure

ov) outlets, at: first glance nothing out how we do the conversion.”

will have changed. Other. tasks included

: . Until they take a look at cer- rewriting all computer pricing

coc }tain-of- the price tags on. the programs and reorganizing the

‘ -; shelves, the ones advising con- keys on cash registers because

_, sumers the item they're: looking all were already being used for

i cat is subject io GST. various functions,

“y--They’re not. hard to find, Another problem, he says is
: Community relations manager Revenue Canada has not been ©
-? Don-Bell estimates those tickets

|’ Ups and: downs of GST
In an effort to prepare shoppers for''what into effect.

awaits them with the introduction of GST, a ‘The list below is extracted from that guide
federally-appolnted GST Consumer Informa- and offers examples of goods/services, the
tion Office produced a guide outlining what category they now fall into and the estimated
should happen to prices once the new taxcomes effect on what you will pay.

a@ brochure to outlining the
changes ‘to keep the introduc-
‘tion of GST as painless as possi-
ble.”

The news isn’t all bad either,
she says, Because the old federal
sales tax was at a higher rate
than the GST, she estimates the
ptice of $12,000 products in the
local Overwaitea have actually
gonedown,

They include health and

‘beauty aids, cosmetics, pet

which used to cost $320 will
go up almost $20.

GROCERIES (Tax free)

While most consumers
have likely assumed there
was previously no tax on
food, the guide says not so.
Although you paid no sales
tax at the check-out, tax had
been paid earlier in the supp-
ly chain. Therefore, it sug-
“gests, elimination of the
federal sales tax and a zero

FRANSPORTATION (Fully
taxed)

Taxi and train fares will
rise almost five per cent. The
effect’ on airfares depends
where you’re going. Tiips to
North American destinations

‘will increase 3.8 per cent but
‘there will be no GST on
overseas flights.

’MEDICAL/HEALTH

FURNITURE/AP-
PLIANCES (Fully taxed)

. Swill appear: under more than
“4 §,000- products on. Safeway's

shelves. And it'll be the same

| Over. at Overwaitea, says .com-
:pany’ spokesman Cheryl

‘Gerhardt.
“The? special labelling is in-

-”. ‘tended to ensure customers are

‘fully: ‘aware what ihe tax

“+ sehanges mean even before they
en ‘get to the cash register, Bell ex-
-plains.

£: Once they have paid for ‘their
urchases,: shoppers can also -
li-at a glance what the new tax —

as: meant:to their total bill, he
dds. Each item that:has GST

oo “applied toit will have a G next
~\ fodt..iand.then at the bottom
ne Will be the total amount. hos

“Confirming ‘a: similar. system

is. being used at ‘Overwaitea,
‘Gerhardt points out it is iden-
‘tical’ to, the one now used for
rovincial sales, tax where the
self tag tells the buyer what the
‘base, pre-tax cost Is. She says
e company | has also. providing

TERRACE — . There'll be a dif-
‘erence. in phone and cable TV
ills because the seven per cent
oods and. Services Tax
‘replaces a federal communica-
tions levy,

<i: That” ey is 11°: per ceit,

‘neaning that ‘cable TV bills will a
"go down begining next month, - ill
reays ‘Sharén -Taylor. of: Skeena

calls :

feet communications ue nee Bu omni
\ now... to” long”: al recover.
Pp GOs, when: GSE: wosta, through. the. 8

foods, paper products, cleaning

. goods and general merchandise

items, However, she cautions,
_ there are other products where,
although the base price has nat
changed, the addition of GST
has pushed. up the fi nal cost ‘to
the consumer.: —

Buy six pastries, for exam
ple, and you pay no GST. Any
less and you do. ”

Bell says there are other

things to watch out for. Buy six -

pastries, for example, and you
pay no GST. Any less and you
do. Plain white milk, fruit juice

drinks and salted peanuts. are
not.

Safeway has also had to wres-
tle. with other problems. The
regulations specify yogurt’ in
containers of less ‘than 500

Sablevision to be

comes in, that cost will @0
down,

But the ast will alto apply to : :
all .services. such as rentals of

line and. equipment nat

previously ‘subject to federal

: taxation; says Mears, |

ST. implications ex:

and ‘unsalted peanuts are all tax ~
‘free’ but chocolate milk, fruit

“ She daldiB.C. Tel customess oh

“entirely clear on what the rules
are,’’ The company had raised a
number. of queries on. specific
-products and then had to wait
for the agency to come back

with an answer.

One thing has been “clear
throughout: the run-up to GST’s
arrival — it has cost both com-
panies a tot of money to get

ready.

part of'a year on the project.

Many years.

cheaper

credit system,
wkkkkk

United States, .

“That repeater places’ his calls |

‘Although Overwaitea has not
yet calculated the total bill,
Gerhardt pointed out company
‘staff involved in-preparing for
_the transition has spent the best

Add to that the cost of chang-
“ing the shelf labels in every one
of its stores and the final figure -
would likely be considerable...

. However, she suggested, the

ongoing costs of acting as the
: federal government's tax collec-
-tors would likely be minimal.
Again, it was the same thing the
‘company had been doing for the
- provincial government for

. One Vancouver resident says.
che has a telecommunications
“system to avoid: any kind of’.
: federal and provincial taxation. ..
- Frank Ogden, who writes the.”
syndicated Dr. sfomorrow ven a
"f .Aumin, has'a handheld device that
‘theis . latest ‘phone connects his phone to.a repeater ; -
“just across the ‘border in the

more than six per cent. For

. GST rating should mean sav-

ings.
But don’t get too excited.
On a 675g loaf of bread,
says the guide, the change
translates to just a one cent
drop in price. For four litres
of milk costing $4, the
decrease should be four
cents,
SNACKS (Fully taxed)
More good news here, says
the guide. The price of a
750ml bottle of cola should
stay the same while a 200g
bag of potato chips costing
$1.80 drops five cents.

RESTAURANTS
(Fully taxed)

Eat out and you hit the
downside of GST. A fast
food meal which used to cast
$3.30 will now be $3.50 while
a $22 dinner at a restaurant

* will now set you back §23.32.
' ALCOHOL/TOBACCO

Fully taxed)
Not much change here ex-

‘cept for beer drinkers who -
- should see a case drop 23
cents, Only a@ one cent in-

‘grease is expected on a 750m!
bottle of Canadian whiskey

ora pack of 25 cigarettes. .
| eee

~ (Fally taxed)

‘All clothing and footwear =

ej- within the American phone of price a expected to rise by

‘system at savings of between 25
4,and 79° péer cent: oF B

Although prices are sup-
posed to fall here, you will
have to buy a big ticket item
tosee any significant savings.
A $3,200 dining room suite
should decrease $66.56 —
that’s just over two per cent

-— but you'll only get a 45

.cent break (0.2 per cent) on @
$225 gas barbecue.
FURNISHINGS
(Fully taxed)
A mixed bag here. No
change is expected on sheets,

bath towels and light bulbs,

flatware and dinnerware will
rise by only a few cents, but
draperies costing $220 should
drop $6.20.

Handymen can look for-
ward to savings of close to
three per cent on power tools
while a $22 can of paint
should fall 52 cents. ;

SUNDRIES (Fully taxed) ;

Laundry detergent costing
$5.50 should go down 12
cents and a $1.30 box of
tissues four cents. Buy a pot-
ted plant, however, and

- you'll be paying about six per

cent more.
VEHICLES (Fully taxed)
New cars will cost less, us-
ed cars more if bought from
a dealer. A $12,400 compact

* ghould-drop $512 but buy a
two-year-old version of the.

same model and the price tag

. goes from $8,000 to $8,064.
-. You'll pay more for any
work on the vehicle with

mosi. parts going up 1.7. per

on gasoline ‘should . drop one...
gent a litre and a $2.85 litre .
Can of oil six cents. cos os

cent add labour cosis from,
$47 to $49.76 an Lour, But -

A bit of everything herve.
Services like dental care and
psychological counselling are
tax exempt so will probably
edge up but contact lenses

are tax free 80 a $155 pair —

should drop $2.33.
Prescription drugs are tax
free and- should fall
marginally but over-the-
counter drugs are fully taxed
and will increase up to 2.7
percent. -
RECREATION/ENTER-
TAINMENT (Fully taxed)
Nearly . all. recreation
equipment will go down.
You should save $2 on a $200
ghetto blaster and more than
$700 on a $17,000 travel

trailer. But a mountain bike |

will go from $550 to $583.43.

T.Y. will be cheaper with a
$20 monthly cablevision bill -

dropping 87 cents but visit,

the local theatre and you'll |
pay 39 cents more on a $7 ad-~
mission. .

PERSONAL SERVICES .

(Fully taxed)

Visits to the hairdresser are
going to cost more —-up
and a."
$370 health club membership :
will rise nearly $22. Get pro-<:

nearly. six per cent —

fessional assistance on yo
income tax return and the f
-will be up about six per cen!
The ‘same applies to legal.

Se ag gBRERSS ors