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To hike or not to hike? Retailers unsure what to charge for PST on July 1

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The Retail Council of Canada said today it wants clarification from the Selinger government as to how retailers should proceed with the implementation of the provincial sales tax increase from seven to eight per cent on July 1.

In a statement, RCC prairie director Lanny McInnes said the increase in the PST without public approval by referendum -- as outlined in The Balanced Budget, Fiscal Management and Taxpayer Accountability Act -- has put Manitoba retailers in a difficult situation.

"With July 1 quickly approaching, retailers are looking for concrete guidance that the PST increase can in fact be implemented," he said.

"Retailers are concerned that they are being put in an untenable position in which they must either implement an increase that has not yet been authorized by law or, if they adhere to Manitoba’s current law, they will be retroactively penalized for not collecting the increased PST."

NDP House Leader Jennifer Howard said the tax increase will be applied July 1 regardless of whether the bill allowing it has been passed in the legislature. Bill 20 is currently stuck in second reading due to procedural delays being used by the Opposition Progressive Conservatives.

Howard said it’s standard practice to bring in tax increases prior to budget bills becoming law. She said the cigarette tax in the April budget has already been applied.

She also pointed to tax bulletins to retailers issued by the province’s finance department outlining the tax increase.

The NDP also say they are not breaking any new ground.

They say in the 1993, the Tory government of former Premier Gary Filmon delivered its budget on April 6, announcing that effective on May 1, the province would add sales tax to items such as children’s clothing, feminine hygiene supplies, school supplies, baby supplies, safety clothing and equipment.

The addition of these items brought in an additional $48 million in revenue, but these legislative changes did not receive Royal Assent until nearly three months later, on July 27 of that year.

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