Tax Executive, The

Canadian commodity and excise tax issues

Canadian commodity and excise tax issues – Tax Executives Institute Canadian Commodity Tax Committee

In connection with Tax Executives Institute’s December 6, 1995, liaison meeting with the Canadian Department of Finance on commodity and excise tax issues, Tax Executives Institute sent the following letter to Brian Wurts, the Department’s Chief, General Operations / GST The Institute’s follow-up submission, along with the minutes of the liaison meeting, will be reprinted in a future issue of The Tax Executive. The questions and comments concerning excise tax issues were prepared by members of the Canadian Commodity Tax Committee, whose chair is Pierre M. Bocti of Hewlett-Packard (Canada) Ltd.

In connection with Tax Executives Institute’s December 6, 1995, liaison meeting with representatives of the Department of Finance on commodity and excise tax issues, I am pleased to forward for your consideration this summary of issues that TEI’s delegation will be prepared to discuss.

In 1994, TEI submitted letters to all of the Provincial Premiers and Ministers of Finance urging them to support the adoption of a harmonized federal and provincial consumption tax regime. Our 1994 agenda and liaison meeting with the Department of Finance (and, indeed, years previous to that) discussed those issues. In order to build upon that foundation and enhance it, we propose that the theme of our 1995 liaison meeting agenda be: Opportunities and Challenges in Harmonizing the Federal GST and Provincial Retail Tax Systems.

In a departure from prior years, we have refrained from submitting a detailed written agenda on a full panoply of technical issues. Instead we simply outline a number of issues we will be prepared to discuss. The purpose of our approach is to free the Department’s and TEI’s representatives from the constraints of a hyper-technical or polemical submission in order to facilitate a meaningful dialogue about the opportunities and challenges of adopting and administering a harmonized federal and provincial consumption tax system. Consequently, we believe that a free-ranging conversation about the legal, economic, constitutional, political, and administrative challenges of moving to a harmonized tax regime will permit us to better understand each other’s perspectives and restraints and identify a number of subjects on which subsequent consultations might prove beneficial.

Among the issues that TEI representatives will be preparea to discuss are:

* TEI’s Support for Harmonization

* Transition and Administrative Costs

* Competitiveness Issues

* Visibility of the Consumption Tax

* The Proper Tax Base and Input Credits Generally

* Allocation of the Tax among the Provinces

* Phase-In of Input Tax Credits

* Special Issues Affecting Financial Institution, Resource, and Transportation Industries

Following the meeting, and with the input provided by the Department’s representatives, TEI intends to submit a more formal position paper setting forth its views in respect of harmonization.

For your information, I also enclose a copy of the Institute’s submission to Revenue Canada in connection with our liaison meeting with Revenue officials. If you should have any questions, please do not hesitate to call either Pierre M. Bocti, chair of the Institute’s Canadian Commodity Tax Committee at (905) 206-3399 or Vincent Alicandri, TEI Vice President – Region I Canada, at (416) 733-6762.

TEI looks forward to and welcomes the opportunity to meet with the Department’s representatives.

COPYRIGHT 1996 Tax Executives Institute, Inc.

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