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MNP’s TAKE: As a Canadian business owner, it's important to know how and when to charge sales taxes for the goods and services you sell and supply to your customers or clients. Transaction taxes add up quickly. Even a change in personnel or software could trigger unexpected errors. In order to protect your business and mitigate risk, it is crucial to have the right processes and tax structures in place to ensure you are fully compliant in all relating jurisdictions. Failing to do so could result in costly tax implications.
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BY KEITH LESLIE FROM THE CANADIAN PRESS
TORONTO - Thousands of Ontarians who bought used cars in May are being notified that they failed to pay the appropriate sales tax due to an "unfortunate" mistake the government is blaming on a private contractor.
The Ministry of Finance is sending letters to 6,500 people who will have to make an additional payment of between $100 and $500.
The mistake by CarProof, a private company that assigns values to used vehicles, generated the wrong value for cars sold in May when the file was uploaded into government systems, Finance Minister Charles Sousa said Wednesday. The buyers themselves did nothing wrong, but will have to pay, he added.
"It was an error that was made, and it's really unfortunate," Sousa said.
"We're reaching out to each one of them individually, and will have a representative to deal with them on a one-on-one basis to ensure the appropriate measures are taken."
About $2.4 million in sales tax was not collected on used vehicles sold across Ontario between May 1 and 27.
Asking those buyers to make an additional payment is only fair to everyone else who purchased a used car and paid the sales tax on the full value of the vehicle, said Sousa.
"We've got to make certain that everyone pays fairly."
Consumer Services Minister David Orazietti said the letters asking for more sales tax should not be a surprise to the "vast majority" of people who bought a used car in May and didn't pay enough tax.
"Based on the value of the vehicles, I think there are certain individuals out there who know, and certainly suspect, because they would have anticipated having to pay this, and probably know full well that they did not pay the appropriate level of tax," he said. "These things from time to time do happen, and we expect to be able to remedy it."
The government has taken steps to make sure "this isolated incident" doesn't happen again, added Orazietti, but the opposition parties blamed poor Liberal oversight for failing to collect the taxes at the time the cars were sold.
"This is a government who aren't paying attention to the details, and are struggling to look for nickels and dimes in the couch to pay off this massive deficit that we have," said Progressive Conservative finance critic Vic Fedeli.
"Good luck to the government to try to chase these people who were given an unexpected discount in their used car purchase."
The Liberals need to do a better job of keeping their eye on exactly what the government and its private-sector service providers are doing, said NDP Leader Andrea Horwath.
"This government doesn't seem to keep tabs on these initiatives that they undertake," said Horwath. "They farm them out, don't keep tabs on them and something ends up going awry, and that's what we have here."
People who get tax bills for the used cars they bought in May can mail a cheque or money order to the Ministry of Finance or pay in person at one of 66 ServiceOntario retail offices.
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This article was written by Keith Leslie and The Canadian Press from The Canadian Press and was legally licensed through the NewsCred publisher network.
Related Topics:Indirect Tax
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