The Canadian government has announced GST relief for Canadians during the holiday season to make it easier for citizens to buy things as well as save money during the holiday season.
GST holiday in Canada
The Canadian government is planning a two-month temporary holiday relief where goods and services and harmonized sales tax will be excluded from many qualifying goods, mainly groceries and holiday essentials, to reduce the financial burden on citizens.
The GST/HST holiday on eligible goods will run from December 14, 2024 to February 15, 2025, if passed by Parliament. The two-month holiday will help many Canadians struggling with the cost of living to enjoy some blissful time with their families.
Canada welcomed the move, small businesses could get a holiday boost and increase spending as people take full advantage of this break. Along with the GST/HST holiday, the government also announced a work rebate for eligible Canadians.
Tax relief on GST
The proposed temporary GST relief for goods and services will start on 14 December 2024. The company will remove GST/HST on eligible goods from the till by the start of the GST holiday.
Citizens should understand that the tax credit will apply to listed eligible goods that are purchased or delivered to the customer during the tax credit period. The tax credit also applies to imports of goods listed during the GST/HST tax credit period.
The government took this initiative because it cannot determine the prices of goods, and in this way it will put money back into citizens’ pockets and thus ease citizens’ much-needed inflation. The government says that in provinces where the goods and services tax is HST, the savings will be greater.
The Canadian provinces with the HST that will save more in the coming tax credits are:
- Nova Scotia
- Prince Edwards Island
- Ontario
- New Brunswick
- Newfoundland and Labrador
What are the qualificationsMr goods for the Canadian GST holiday?
The government has included the following types of goods in the upcoming bi-monthly GST tax breaks if the bill is passed:
- Children’s clothing including baby clothes, blankets, children’s clothes, socks, ties, gloves, mittens, scarves, etc.
- Children’s footwear, other than footwear, is intended exclusively for recreational activities and sports.
- A child car seat that meets the safety standards for motor vehicles according to the law.
- Baby diapers
- Reading printed books or audio recordings of books, except for magazines, brochures, coloring books, sales catalogs, price lists and others
- Only print newspapers, not digital newspapers, magazines, etc.
- Food and beverages, such as candies, ice creams, cakes, muffins, alcoholic beverages, restaurant food and beverages, etc.
- Natural or artificial Christmas tree and decorative items.
- Puzzles for all ages
- Children’s toys for children up to 14 years old
- Video game consoles, physical Mrbut the media etc.
Impact of the GST holiday in Canada
The GST holiday in Canada will not only affect the lives of households but also businesses and the economy, let’s see how this two-month tax break affects all stakeholders:
- Canadians will be able to shop for goods and services, enjoy restaurant meals with families and friends at affordable prices and save money. According to government estimates, a household that spends $2,000 will save over $100 over the holidays. Families living in an HST province can expect to save $260 over a $2,000 basket.
- Businesses will enjoy an increase in sales and business as people will shop more during the tax break.
- Businesses must make billing changes to remove GST/HST from qualifying goods, which can be a daunting and confusing task for small businesses.
- Restaurants expect a boost during the holidays due to tax breaks and an improvement in business, which has been operating at a loss since the pandemic.
- The holiday tax break will increase the purchasing power of Canadians and the rate of sales of businesses, which will affect the economy, although not by much, but a little.
- The two-month GST/HST tax break will cost about $1.6 billion in federal tax credits.
The Canadian government has proposed to introduce a GST/HST tax break for two months from December 14, 2024 to February 15, 2025 to offer some relief to citizens. Citizens should check the list of eligible goods to plan their finances well and spend accordingly, saving money this holiday season.
