Just recently it was announced that the GST, Goods and Services Tax, here in Canada will be reduced from 7% to 6% starting on July 1st of this year. I guess that means everyone will be able to save some money here and there for other things. For me personally, I have kind of gotten used to the 7% and Iâ€™m not sure how much money a 1% decrease can help me save in a year. Like they say though, money has to come from somewhere and most likely we will have to make it back through other ways which means an increase in other things.
For those who are unaware, on top of the GST people here in BC also pay another 7% due to the PST, Provincial Sales Tax, on various goods and services. That means in most cases one would normally pay and extra 14% in taxes on their purchases. I know a lot of people from other countries are usually shocked at the amount of taxes that we pay and vice versa when someone elsewhere complains that their 4% total tax rate is too much, I just wonder if they would require a therapist by the time they get here.
In the end, I think most people will probably be spending and saving about the same regardless of the tax decrease. From what I have seen in most cases, if you give a person who canâ€™t save money an extra $100 so that hopefully they will have more money left over in the long run for more important things, you just know that in a few hours later they are going to come back with an even bigger bill than before. In my opinion, one has to work on their spending habits first instead of relying solely on gaining more income to achieve long term financial relief.