Quebec’s finance minister says the province will impose provincial sales tax on Netflix and other e-commerce ventures.
READ MORE: Quebec says it will impose sales tax on Netflix
The federal government has already said no to making Netflix charge GST. Finance minister Carlos Leitao is trying again to convince the feds to change their minds in a new letter to the federal finance minister.
He wrote that it’s one of the recommendations from a Quebec public finances commission on tax havens, as well as a recommendation from OECD countries.
On Wednesday, Leitao said in 2018, Quebec will introduce legislation to force companies like Netflix, Amazon and other online retailers to collect provincial sales tax from its Quebec customers.
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There’s a hiccup in Quebec’s plan to force foreign online companies to charge sales tax to Quebec consumers.
“Our sales tax, the TVQ is also harmonized with the federal GST,” Leitao said.
However, Quebec doesn’t need Ottawa’s permission. Even if the feds don’t budge, Leitao says Quebec is going ahead anyway.
This comes after a plea last week from one of Quebec’s top entrepreneurs.
“This is the idea that if you want to do business in Quebec, you’ll collect the sales tax and follow the law,” said Peter Simons, president of Simons Department Store, at the National Assembly on November 1st.
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He was supporting a Quebec Solidaire bill that would force banks and credit card companies to keep track of online transactions and provide that information to Revenu Québec. Simons said that with the current state of things, local businesses are at a disadvantage.
“It is important to put in place a level playing field and we are moving as fast as we can,” Leitao said Wednesday.
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“Current tax laws are archaic. They’re from the last century,” said Quebec Solidaire MNA, Gabriel Nadeau-Dubois.
Quebec Solidaire says the government’s track record getting foreign companies to collect sales taxes has not been successful:
“The strategy with Airbnb, for example, was to ask the customer to do a voluntary declaration,” Nadeau-Dubois said. “And it forces Revenu Québec to run after each of its customers.”
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The Parti Quebecois (PQ) says in this debate, ultimately, the tax burden falls on the consumer — to that, the PQ proposes its own solution: if online companies collect sales tax, the added revenue should mean a lower sales tax rate.
“And globally, the fiscal burden of Quebecers or Canadians would remain the same,” said Nicolas Marceau, PQ finance critic.
Marceau said it solves the problem of equity without hurting consumers. It’s an idea the finance minister said he’s not considering.
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