Retailers call on Ottawa to implement GST rebates for tourists

Could bring in an additional $407 million in revenue

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Some of Canada’s prominent retailers have banded together to lobby the federal government to allow international tourists to apply for GST and PST refunds when purchasing goods while on vacation, and that the measure will be implemented. It claims to boost the economy.

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The group includes Montreal-based shoe retailer Aldo Group, which calls itself the Alliance for Visitor Tax Refunds. jewelers Birks Group Inc.; menswear Harry Rosen & Co.; Hudson’s Bay Co., which operates his chain of iconic department stores of the same name. Commercial real estate firm Cadillac Fairview Corporation counts Toronto’s Eaton Center among his one of its retail properties.

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The Vancouver-based QuadReal Property Group, the Edmonton-based Triple Five Group, and the Retail Council of Canada are also part of the group. In July, the two companies sent a letter to Tourism Minister Randy Boissonault asking them to create a system that would allow retailers to exempt tourists from paying consumption tax at counters and allow tourists to use special machines to request refunds at customs. requested. They suggested that the government use companies that provide digital-first tax refund systems and software. Switzerland’s Global Blue Group Holding AG, for example, is the only non-Canadian company in the new retail alliance.

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Jean-Christophe Vedhos, President and CEO of Barks, said: “We have seen a visitor tax as a competitive advantage for attracting tourists in the European Union, Asian countries and around the world. “I feel that Canada is at a disadvantage because they have not put that system in place.”

Canadian retailers have struggled since the pandemic began, dealing with all sorts of problems, from labor shortages to, more recently, constrained consumer spending due to high inflation. Statistics Canada reported that retail sales in July fell 2.5 percent from he June. Early estimates point to a 0.4% increase for him in August, but that’s only about half the data agencies typically collect for final print.

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Bedos said the rebate would boost the sector by luring tourists to shop in Canada and boosting sales for retailers, while also benefiting other businesses that benefit from tourism, such as restaurants and hotels. The Alliance commissioned a study to model the consequences of the tourist tax rebate, which was found to increase visitor numbers by 193,000, leading to an additional $407 million in revenue. The study found that increased spending will create demand that could support an additional 32,100 jobs in the travel and tourism industry.

A Boissonnault spokesperson said most goods acquired or imported into Canada are subject to GST. “By applying (GST) to a wide range of goods and services, taxes will be more efficient, simpler and lower. It was discontinued in 2007 because it proved to be an ineffective method.”

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The federal government previously had a rebate program similar to the one sought by the Retail Federation, but Stephen Harper’s government scrapped it in 2007, reducing the number of goods and services tourists could charge for. introduced a foreign convention and tour incentive program.

In February 2006, the Canada Revenue Agency found that of all GST rebate programs, including domestic, visitor rebates accounted for 2% of claims. In September 2006, as part of an early Harper fiscal tightening, his government cut more than $78 million of his funding for a tourist rebate program, the CBC reported.

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“For me, I think Canada loses out by not having a system because I have worked in the jewelery industry in the UK and France before and I have seen how it works. We have seen the benefits,” says Bedos.

Using a third-party tax refund provider allows stores to collect and analyze data to understand shopping habits. That was the positive side when Bedos worked in France.

“We had data on the seasonality of[shoppers]by country of origin, and each year we planned our marketing and PR according to what we could expect,” says Bedos. “We would have welcomed them and would have been ready to give them a better experience than they would have had without that information.”

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Retailers call on Ottawa to implement GST rebates for tourists

Source link Retailers call on Ottawa to implement GST rebates for tourists

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