GST rate cut takes effect July 1, 2006

In the federal budget announced May 2, 2006, the federal government followed through with its promise to cut the GST rate from seven per cent to six and the HST rate from 15 per cent to 14 starting July 1st, 2006.

Changing the rate may be a simple process for small businesses (using simple systems or more manually-based processes in which they can override the default tax amount), larger businesses may not be so lucky. Many face more serious challenges in reprogramming their systems.

For more information on applying the rate reductions for July 1st, 2006, businesses may want to consult the Canada Revenue Agency's questions and answers at:

http://www.cra-arc.gc.ca/agency/budget/2006/gstrateqa-e.html