A Richmond food court business has decided to continue collecting the Goods and Services Tax (GST) despite the federal government's announcement of a GST holiday.
But this is due to the "complexities" of implementing it, according to a notice posted by Jimmy Cafe, a food court stall inside Admiralty Centre on McKim Way.
On Nov. 21, the federal government announced a on specific items, including food and drinks, from Dec. 14 to Feb. 15 to alleviate cost-of-living pressures.
Jimmy Cafe posted the notice in December stating its business will not be doing the GST exemption.
"Due to the complexities involved in its execution, we have decided to continue charging our original prices," reads the notice.
Instead, the cafe stated its accountant would "calculate the GST collected during these two months" at tax time and would donate the money to the Salvation Army Rotary Hospice House in Richmond.
"We kindly ask for your understanding and support."
GST holiday 'flaky': Ian Tostenson
The GST/HST break was a "poorly engineered" and "silly" decision by the federal government, particularly due to the lack of time between the announcement and the start of the tax exemption, said Ian Tostenson, president of the BC Restaurant and Foodservice Association.
"Most businesses need the time to change their point of sale. Some can't do so in a short period of time," said Tostenson.
He added for some businesses it may be easy, but others may encounter challenges such as language barriers.
"I think the business in Richmond is being honest by saying, we're going to collect it properly to do the things that we have to do. You've got to give them full marks because some people really struggled to implement this."
In comparison, it may be easier for larger businesses that have more resources to change their overall financial systems to accommodate the exemption.
Tostenson said this Richmond business "clearly had an honest attempt" where they tried to implement the rule, but they couldn't find a way to do it.
If the Canada Revenue Agency were to audit restaurants or food and beverage businesses, the BC Restaurant and Foodservice Association would be the first organization they call, he explained.
"We'll be there to support (these restaurants) because this thing that the government implemented is so flaky."
The Government of Canada website also states businesses that make "reasonable efforts to comply with the legislation" and remit their collected GST/HST to the CRA won't be the focus of compliance issues.
Rather, they will be focusing on businesses that "willfully and egregiously" refuse to comply.
Long-term government strategies needed to help restaurants
Tostenson said the economy is not doing well and B.C. is "having a tough time right now."
The GST exemption in B.C. only offers a savings of five per cent on a bill, which is not as much compared to 13-per-cent savings in Ontario or 15 per cent in the Maritimes where there is an HST.
"It really comes down to the fact that five per cent doesn't really move the needle in a market in British Columbia," he said.
"Our consumers are a bit reluctant right now. They're really watching their pennies budget-wise, and our economy is a bit weak."
Tostenson added the temporary tax exemption "wasn't well thought out" when it came to helping the restaurant industry.
"What you want to do is get governments to have a longer-term strategy by saying we recognize that taxation in small business, in this case restaurants, can be a deterrent to consumer spending. So let's put something in place for this," he said.
He also worries the temporary legislation wasn't properly communicated to small businesses in languages other than English, noting that English isn't the first language for many business owners in Richmond and throughout Greater 91原创.
"They probably are doing everything they can to try to comply, because they want to comply, but they may not understand. And again, that's something you can't do with three weeks notice. That's not fair."
The Richmond News made several attempts to speak with the owner of Jimmy Cafe but could not do so prior to publication.
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