11:15am Monday 12th October 2009
By Jeremy Taylor
As you will know, we have been pressing for local taxes to be spent locally as it is ridiculous to see so much of our Business Rates spent elsewhere in the country. About £300m is collected from businesses in the Gatwick Diamond with around 9% (£27m) returned to this area. As far as I can tell, the rest is used to prop up the poorly performing regions in the rest of the country. At a recent meeting with Jonathan Shaw, Minister for the South East, we urged him to look at spending money on the South East’s infrastructure as a priority, before it becomes a necessity. I don’t hold out much hope.
The difficulty with tax is do you make it part of the total price so it is ‘hidden’ or does it get added on at the point of sale? What impact would it have on you as a consumer (& we are all consumers) if the price displayed was net of tax?
I ask this as, while on holiday in Canada recently, I would be comfortable with the price displayed, but be consistently surprised by the increase from taxeswhen I got my wallet out.
For example, our $160 hotel room at Niagara Falls had a Goods and Services Tax (GST) of 5%, a Provincial Sales Tax (PST) of 5% and 3% Tourism Improvement Fee. There was also the ‘optional’ valet parking service at $20 + taxes which made our room in excess of $200. Would I have booked if that rate had been published … I’m not sure. (But the view was exceptional!) However, those three taxes are still lower than our 15% vat (due to rise to 17.5% in the New Year) and there is a real local flavour to where the revenue is spent. The PST is a tax that is collected and used in the Province of Ontario while the Tourism Improvement Fee is specifically for the Niagara region.
Local taxes for local projects are needed now to ensure the continuing prosperity of the south East. Your thoughts, as always, are very welcome.
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