Canada’s two-month GST/HST holiday began Saturday amid growing concerns about implementation challenges, as even major corporations like PepsiCo Canada announced they would continue charging the tax despite the federal mandate.
In a December 10 memo to customers, PepsiCo Canada revealed it would maintain GST/HST charges on qualifying products throughout the holiday period, citing “complexity of systems” and “timing constraints.” The announcement sparked criticism, with industry observers noting that if large corporations with substantial resources struggle to implement the changes, smaller businesses face even greater challenges.
Still think the GST/HST holiday is a breeze for small business?
— Dan Kelly (@CFIB) December 12, 2024
All companies (including manufacturers and wholesalers) selling products subject to the holiday are to zero-rate the tax starting Dec. 14.
Here is a response from @PepsiCo Canada. If large companies can't do… pic.twitter.com/jfCLn0L8fo
Local Ottawa businesses report mixed experiences with the tax exemption, which eliminates sales tax on various items including restaurant meals, groceries, children’s merchandise, and print publications through February 15.
The implementation has posed particular challenges for businesses with online operations. Some retailers have had to create workarounds for e-commerce platforms that couldn’t fully accommodate the tax changes.
A New Brunswick restaurant owner shared he spent 7 hours last night to reprogram his point of sale system to remove the HST on the right items. It required him to reset each menu item individually.
— Dan Kelly (@CFIB) December 14, 2024
And he gets to do it again on Feb 15!
While some highlighted difficulties in determining eligible items, noting limited direct guidance from authorities despite online resources being available.
Good luck to Canada's small businesses as they begin the messy, unclear and last-minute GST/HST holiday today.
— Dan Kelly (@CFIB) December 14, 2024
Please keep CFIB posted on what you are seeing in terms of consumer behaviour:
– questions, complaints at the point of sale
– requests for price adjustments or…
In response to these concerns, the Canada Revenue Agency has established an online tool and dedicated hotline to assist businesses. Small Business Minister Rechie Valdez assured that the CRA will take a “practical approach” to enforcement, focusing on reasonable compliance efforts rather than strict penalties.
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