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The Independent Voice for ’s Accounting and Financial Professionals www.thebottomlinenews.ca Vol. 29 No. 2 February 2013 B.C. panel delivers verdict on PST return By JEFF BUCKSTEIN busi- “There’s no question that return of ness panel believes it has the PST is going to negatively impact A found a credible made-in- B.C. compromise that addresses British Columbia’s competitiveness.” concerns about any negative eco- nomic fallout from a return to the Laura Jones, CFIB provincial , while The Independent Voice for Canada’srespecting the Accountingpublic’s wishes to invest and in that equipment.” Financial ProfessionalsThe panel’s key recommenda- scrap the harmonized sales tax. Charles Lammam, associate tion was for the government to B.C. plans to end the HST this director for budget and tax policy introduce a fully refundable invest- April, in accordance with deci- at the Fraser Institute in Van- ment tax credit for businesses to sive public opposition to it that couver, calls a return to the PST “a claim on income tax returns. This was expressed in a 2011 refer- huge leap backwards” that will credit would be equal to the PST endum. result in less investment in the paid on all acquisitions of The seven-member Expert province because it will raise the machinery and equipment, Panel on Business Taxation, com- marginal effective tax rate. “Fewer including computers and software. prising business, accounting and businesses will expand their oper- “What we’re trying to do is get academic representatives, was ations. We’ll get fewer businesses rid of the most destructive part of struck by the province in January, coming to B.C. to set up new oper- 2012, to provide analysis and rec- ations, and less job growth than we See New on page 21 ommendations on improving the otherwise would.” province’s tax competitiveness as But Iglika Ivanova, an econo- well as ways to streamline the mist with the Canadian Centre for PST. The panel also had a man- Policy Alternatives in Vancouver, date to deliver recommendations disagreed with that sentiment. “I Under dramatic coloured stage lighting, Fortune Magazine senior that were revenue-neutral. think in the grand scheme of editor Geoff Colvin told the CMA Winter Conference audience that “There’s no question that things, it’s small, and we shouldn’t no matter what the economic challenges, some will come out on top. return of the PST is going to worry about it being bad or good,” 30 ciences negatively impact British Colum- she said. op S T

bia’s competitiveness,” said “We have spent too much time

Laura Jones, executive vice- over the past two, three years dis- i f e Uncertain times calling L president of the Canadian Federa- cussing this, and have much bigger ompliance

tion of Independent Business and problems and more pressing con- | / C

a panel member. cerns in B.C. to deal with. For pril May A

“Basically, the PST is a kind example, right now our economy ccountin g for innovative responses March A of tax that not many jurisdictions is very reliant on exports of natural ervices

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By IAN HARVEY historical pattern to fall back on for use anymore. It’s a tax not just on resources, so [falling] world com- ’ conomic uncertainty is dis- guidance. But good, well-managed the final sale of a good but also modity prices are affecting provin- rupting markets and busi- companies that focus on creating on the inputs that go into produ- cial revenues more than the tax.” overnance G PUBLICATIONS AGREEMENT NO. 40065517 NO. AGREEMENT PUBLICATIONS Eness models, but that doesn’t value are most likely to survive. cing [that good]. So it’s kind of a Ivanova also said a high provin- anada C mean that someone, somewhere The Great Depression provides tax on a tax. When you tax busi- cial poverty rate and an education inancial isn’t working out a way to succeed, some lessons, he said. Following nesses on machinery or com- system that she said is becoming F Fortune Magazine senior editor the stock market crash of 1929, puters or software or the things less accessible to lower income Geoff Colvin says. companies such as DuPont they need in order to produce individuals are hurting B.C.’s eco- Colvin, speaking at the CMA goods and services, it creates a nomic performance more than a Winter Conference, said there is no See Business on page 22 very negative incentive not to change in the sales tax credit will.

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© 2012 Certified Management Accountants of Ontario. All rights reserved. ®/® Registered Trade-Marks/Trade-Marks are owned by The Society of Management Accountants of Canada. Used under licence. The Bottom Line February 2013 Technology 21 Getting smarter with mobile apps

of converting an expense receipt calendars. However, if you need to team version is available starting at it’s connected to the Internet. computer into an accounting entry. You use keep financial and client docu- $795 per year for 1TB of storage If you use recent-model the smartphone camera to take a ments at your fingertips, that for five users. Hewlett-Packard printers, the eas- Monitor photo of the paper receipt, then amount of storage can be insuffi- Dropbox is available in mobile iest cloud-printing app to set up is upload it to your account on the cient. versions for iOS, Android and HP ePrint Home&Biz (available Expensify.com website. Expensify File-sharing solutions let you BlackBerry. for Android and Symbian). It lets scans your snapshot and performs effectively extend your smart- If you use Intuit’s Profile tax you control your print job settings, By a credible OCR (optical character phone data storage to the Internet prep software, Intuit is testing Pro- preview before you print and mon- recognition) operation. cloud, as long as you have access file Connect. This app is designed itor printer and print job status. Richard Most times, you wind up with to a solid, high-speed, wireless to facilitate cloud access to tax You must register (it’s free) before Morochove accurate data about the date, mer- connection. Ideally it should be a information. It can be used to using this service. chant, amount and category of the minimum of an HSPA data con- access client contact info, review Google’s Cloud Print takes a expense. Sometimes, you need to nection to ensure quick retrieval tax return data, check the status of little longer to set up, but works make a minor correction or two. and storage of electronic docu- a tax engagement and more. with almost any printer. You can ith more than 700,000 Expensify integrates directly ments. Theoretically, HSPA per- Connect requires that you also share your printer with others. apps available for each with a number of accounting mits data transmission of up to 21 install Profile’s CloudBridge Finally, banking apps from the Wof Apple’s iOS and Goo- applications, including Quick- Mbps. However, in practical appli- module on the computer desktop. Big Five banks have come a long gle’s Android platforms, there’s no Books and FreshBooks. It can cation, HSPA transmission in a The app is currently available only way in a few years. One early ver- shortage of mobile software work, after some tweaks, with range of two to seven Mbps is for iOS devices and works only sion I tested allowed you to review options for compatible smart- many other accounting programs. more common. with Profile files. account balances and little else. phones and tablets. Unfortunately, the capability to Dropbox is a well-established It will be useful to more Now banking apps let you do However, many of these apps reimburse employees via online app that works with most smart- accountants when it’s available for almost as much as you can on a aim to entertain consumers and are direct deposit works only with U.S. phones and PCs. Depending upon additional mobile platforms. In the PC, including buying and selling not particularly useful for busi- bank accounts. However, expense your needs, you can use it for just grand scheme, Intuit plans to even- securities. However, the much ness. It can be time-consuming to reimbursement using PayPal your personal and private online tually extend selected cloud access smaller display can mean you need winnow the consumer chaff and works in Canada. storage, or you may share specific to QuickBooks client data files. to wade through more levels of find the winning business wheat, The Expensify app is available folders and files with others you One of the downsides of using a menu options. but there are a handful of financial for most smartphones. It’s free for invite. smartphone compared with a note- and business-oriented apps that the first two employees and $5 to You can store virtually any file book or desktop PC is the diffi- you may find useful. $10 per month for each additional in Dropbox, but you’ll need a culty of printing a document. You Richard Morochove, FCA, is presi- Expense management is par- employee who uses the service mobile app that can open and edit can’t plug-in a standard print USB dent of the Toronto-based computer ticularly well-suited for mobile during the month. the file data if you want to view cable to your smartphone. consulting firm, Morochove & apps, since travel expenses account Data storage is limited in most and change it on your smartphone. That’s where cloud printing can Associates Inc., serving accountants for the lion’s share of reimbursable smartphones to 32GB or 64GB. The free version of Dropbox help out. You install a cloud- and their clients. E-mail comments charges for businesses. That’s sufficient for retaining sev- offers 2GBs of storage, which can printing app and use it to send a to: [email protected]. Expensify is an easy-to-use app eral months of e-mail, along with be increased if you refer others to document to your printer, which that aims to streamline the process contact details and appointment the service. For business use, a can be located anywhere as long as New investment tax credit tops checklist $65 million. That amount is equal to maintain an exemption on basic Continued from page 1 to the estimated value of the groceries, including ready-to-eat the PST coming back [which is] investment tax credit those sectors meals from grocery stores, restau- that companies will be discour- are expected to receive in 2014. rants, and other eating establish- aged from investing in equipment “We didn’t want to put it all ments. and technology,” Jones explained. back on consumers,” Jones When the HST was introduced, It would help keep B.C.’s stressed. “We looked at a number the provincial portion of that tax overall tax rate on investment in of ideas for how to craft this. We applied to meals from restaurants, capital goods competitive with did have some representation from automatically increasing the tax other jurisdictions, Lammam said, the mining industry on the panel, associated with eating out by adding investment in equipment and the feeling was that’s an seven per cent, which angered and technology improves worker industry that’s done fairly well many in the industry, as well as productivity, leads to higher recently.” some consumers. incomes and stimulates job Ivanova supports this recom- “We weren’t going to make a growth. mendation. “A surcharge on recommendation that restaurant However, the province needs to mining and oil and gas definitely meals be included because we consider moving back to a value- sounds like a good idea consid- respect the referendum results. We added sales tax system — not ering that British Columbia has set weren’t trying to turn everything necessarily an HST, but a system its goals around climate change, on its head,” Jones said. where all business inputs, not just and we have to put into legislation She remains hopeful that at Jones Ivanova capital goods, are exempt from about how we’re going to [deal] least some of the recommenda- sales taxation, he argued. have harmonized their sales taxes with greenhouse gas emissions by The panel also made a number tions will see the light of day. The panel recommended that with the GST. However, it is far 2020,” she said. “Increasing the of recommendations with respect “We’re in a very interesting polit- the government appoint a task more efficient in eliminating tax surcharge on their tax is definitely to streamlining the PST to reduce ical time in British Columbia, and force to explore and develop the cascading than the PST and it is the way to go.” compliance costs. I think some of this is a bit of a design of a broad-based business simpler to administer,” the report The panel also recommended For example, it recommended third rail in terms of anyone transfer tax (BTT) that would said. that the government begin imple- retaining a point-of-sale exemp- wanting to touch it — which is include virtually all goods and ser- Jones told The Bottom Line the menting a 0.5-per-cent increase in tion for adult-sized clothing pur- unfortunate because it’s important vices as a form of value-added tax. proposed BTT is not the same as B.C.’s corporate income tax rates, chased for children under 15, as for the economic well-being of all The BTT would be based on sales the HST. “We were very mindful beginning April 1, 2014; that was was done under the HST and the British Columbians that we face and purchases reported by a busi- the public here doesn’t want an also part of the panel’s effort to former PST. However, it also rec- up to what’s happening.” ness, rather than on each trans- HST, but we were trying to find ‘is spread taxes under revenue-neutral ommended that the point-of-sale The province’s Standing Com- action. The panel claimed that the there a way to move toward a scenarios among business and certificates for such clothing be mittee on Finance and Government broad taxation base associated value-added tax that’s a little bit consumers, Jones explained. replaced by a system under which Services listened to members of with a BTT would permit such a more kind of made-in-B.C.?’ ” That recommendation can be parents or guardians keep their the panel during its 2013-14 tax to be levied at a much lower The panel also asked for busi- construed as being unfriendly to receipts and use those to claim an budget consultation. It encouraged rate than the PST. ness concessions, recommending, the investment climate in B.C., annual refund. “It’s a huge irritant the Minister of Finance to consider “The BTT might not have the for instance, that beginning in complained Lammam; if corporate for retailers to have to keep these the recommendations as a means advantage of a common adminis- 2014, a surcharge be placed on taxes have to rise a half point, it lists at the cash register,” Jones of mitigating the impact of the tration or using the same base as provincial mining and oil and nat- would be better to do so with the explained. province moving back to a PST/ the other Canadian provinces that ural gas revenues in order to raise HST in place, he asserted. Another recommendation was GST system.