Personal Finance

GST Increase 2024: When is the GST Increase Coming Out this Year? GST Increase Forecast

Explore details about the anticipated GST increase in Canada for 2023-2024 in this article. It covers essential information on the potential timing of the GST adjustment in Canada and related details.

GST Increase 2024 Overview

The Goods and Services Tax (GST) in Canada applies to a wide range of goods and services, including retail items and real property. Some provinces use a Harmonized Sales Tax (HST) by combining the GST with their provincial sales taxes.

GST is collected by registrants at the point of purchase, with the current rate standing at 5% for taxable supplies. The Canadian Government will provide updates on any potential GST rate changes for 2024.

Understanding GST How it Works?

GST registrants charge and collect GST on taxable supplies, filing GST returns to report the collected tax. Zero-rated supplies and exempt goods and services exist, with registrants able to claim Input Tax Credits (ITCs) for GST paid on purchases for zero-rated supplies.

In summary:

  • Taxable Supplies: Charge GST, Claim ITCs.
  • Exempt Supplies: Don’t Charge GST, Cannot Claim ITCs.

Current GST Rates in Canada

Provinces employ different GST/HST rates, with some using a combined form of their provincial sales tax and GST. Others maintain a standalone GST rate of 5%. Consult the Canada Revenue Agency (CRA) website for specific rates in various provinces and territories.

GST Registration Criteria

Individuals must register for GST if they provide taxable supplies in Canada and do not qualify as small suppliers. Small suppliers, non-residents not conducting business in Canada, and those solely engaged in property sales are exempt from registration.

Types of Supplies:

  • Taxable Supplies: Subject to GST/HST.
  • Zero-rated Supplies: Charged at 0%, ITCs can be claimed.
  • Exempt Supplies: No GST applies.

Anticipating GST Increase in Canada

As of now, information on a GST rate increase in Canada for the upcoming years is limited. The current GST rate is 5%, is expected to remain unchanged in the next calendar year. Any alterations to the GST rate will be communicated by the Government of Canada.

Potential outcomes of a GST increase include adjusted prices for goods and services, influencing the GST Credit amount.

Conversely, a decrease in the GST rate could lead to reduced prices for taxable goods.

Official announcements regarding the GST increase, if any, will likely be made at the beginning of the next tax year.

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The current GST rate of 5% is expected to persist unless official changes are communicated by the Government of Canada.