New GST/HST Tax Break Kicking In On December 14, 2024 in Canada
In Canada, a temporary GST/HST tax break is set to take place from December 14, 2024, to February 15, 2025. This initiative, part of Bill C-78, aims to provide financial relief to Canadians during the holiday season by exempting the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST) on various essential items.
New GST/HST Tax Break In Canada
Key Details of the Tax Break:
Duration: The tax holiday will last for two months, from December 14, 2024, to February 15, 2025.
Eligible Items: The tax break will apply to a wide range of products, including:
Groceries: Essentials like fruits, vegetables, and meats are already exempt from GST/HST, but prepared foods and snacks will also be included in the holiday exemption.
Children's Clothing and Goods: This includes clothing, diapers, car seats, and toys for children.
Restaurant Meals: All meals purchased at restaurants, including takeout and delivery, will be tax-free.
Alcoholic Beverages: Beer, wine, and cider with an alcohol content of 22.9% or less will be exempt, as well as premixed drinks with an alcohol content of 7% or less.
Books and Newspapers: Printed books and newspapers will qualify, but e-books and digital versions will not.
Financial Impact: The federal government estimates that this tax break could cost approximately $1.5 billion, with potential costs rising to $2.7 billion if provinces with HST seek compensation for lost revenue. However, some provinces, like Ontario, have indicated they will not seek compensation, which could reduce the overall financial burden on the federal government.
Provincial Participation: Ontario and some Atlantic provinces have committed to matching the federal tax break, meaning consumers in those areas could see a total tax relief of between 13% and 15% on eligible items due to the combined federal and provincial tax exemptions.
This initiative is part of the government's broader strategy to help Canadians cope with rising living costs, especially during the holiday season.
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