Harmonized Sales Tax - 2013 Implementation

2013 Implementation

In its provincial budget released 18 April 2012, the Government of Prince Edward Island announced plans to introduce a 14% HST to be implemented on 1 April 2013; this would reduce the PEI provincial sales tax component from 10% to 9%. It should be noted that the Government of Prince Edward Island "taxed the GST". Since the implementation of the federal GST in 1990, PEI's 10% PST has been charged on the subtotal of goods and services which included the federal GST. This resulted in a combined tax of 17.7% before the 7% GST was reduced to 6% and then 5% in 2006 and 2008 respectively. As of 2012, consumers in PEI pay a combined 15.5% tax rate (5% GST and 10% PST applied to the subtotal) which will disappear following the implementation of the 14% HST in 2013.