‘To me its important’: RST commission allowance cut jars small business

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This article was published 23/07/2024 (800 days ago), so information in it may no longer be current.

The provincial government’s decision to remove the commission allowance on retail sales tax remittances has left at least one Winnipeg small-business owner at a loss.

Jerzy Przybyl, co-owner of My El Spa on St. Mary’s Road, noticed the change earlier this month when he filed his second-quarter remittance.

Prior to the change, which was included in the 2024-25 provincial budget, businesses collecting and remitting the retail sales tax received a commission of 15 per cent of the first $200 of tax collected and one per cent of the remaining tax, up to $3,000.

The maximum commission permitted per period was $58, and if the retail sales tax reported in a period was more than $3,000, no commission was allowed.

These commissions could total up to $58 per month, or $696 per year, for small businesses.

Przybyl said he got to the last page of the form he was filling out and didn’t see the commission amount to be received. Thinking he had missed something, Przybyl started over, only to get the same result.

A subsequent internet search drew information on the change in an article from the Canadian Federation of Independent Business.

“I don’t know if the government needs to ask people for permission (to make that kind of change) — I guess they don’t — but some form of announcement, some form of public statement would at least be fair so I’m not finding out at the very last minute,” Przybyl said. “It throws me out of calibration, right?”

For My El Spa, the commission amounted to “a few hundred dollars” annually.

That’s a few hundred dollars the business will no longer receive — money Przybyl said he could be putting toward utility bills.

“The cost of running business these days — and I’m not saying anything new — it’s getting higher and higher,” he said. “So any few hundred dollars might seem insignificant from the outside, but to me it’s important.”

The CFIB has heard from concerned small-business owners about the province’s decision to remove the commission allowance, said Brianna Solberg, CFIB provincial affairs director.

In a recent CFIB survey, nearly half (47 per cent) of Manitoba’s smallest businesses — those with zero to four employees — said they are opposed to the removal of the commission.

The smallest businesses don’t have administrative assistants or human resources departments, Solberg said, meaning it’s business owners themselves who are the ones “forced to take away time from running their business just to file these (retail sales tax) remittances.”

“It’s not unreasonable for (businesses) to assume they should be compensated for that, especially the smallest businesses who could use any (commission) to pay down (COVID-19) pandemic debt or increase employee compensation.”— Brianna Solberg, CFIB provincial affairs director

She added businesses are charged merchant fees by credit card companies on top of the seven per cent retail sales tax. Every time a business collects the sales tax for the government, it incurs a higher fee from the credit card company.

“It’s not unreasonable for (businesses) to assume they should be compensated for that, especially the smallest businesses who could use any (commission) to pay down (COVID-19) pandemic debt or increase employee compensation,” Solberg said.

Manitoba Finance Minister Adrien Sala said the province made the change because tax filing “has been simplified” since becoming a digital process. Eliminating the commission “recognizes that there is a reduced administrative burden” to filing the taxes, he said.

Sala added the government has increased the sales tax registration threshold to $30,000 of taxable sales (from $10,000). Businesses with sales below this increased threshold are no longer required to register and collect sales tax in Manitoba.

“We brought that forward because we understand the challenges that small businesses are facing and we wanted to help them to save money and reduce their burden,” Sala said.

When asked if the province consulted with business owners prior to removing the commission allowance, and if and how the change was communicated to business owners, Sala reiterated the increased threshold.

“We know that small businesses in Manitoba are the backbone of our economy and that they’re extremely important to the overall success of our province,” the minister said.

The increased threshold is cold comfort for Przybyl, whose annual revenue exceeds the threshold.

“Every amount helps these days,” he said. “Cost of living rises, minimum wage rises — everything is going up and businesses like ours (are) more and more difficult to sustain.”

aaron.epp@freepress.mb.ca