Brandon Sun - PRINT EDITION
WINNIPEG — That new tattoo will cost more as of Sunday.
So will any haircut or styling that costs more than $50. So will any facial, pedicure and manicure or, if you’re so inclined, any scarification or body branding.
These and a whole raft of other personal services, from mud baths, scalp treatments and non-dental teeth whitening, will, after Canada Day, be subject to the province’s seven per cent retail sales tax (RST).
The new tax measures were first revealed in the Selinger government’s April budget and will, depending when you need to get your hair done, impact just about every Manitoban who makes an appointment with a hairstylist, spa, tattoo parlour or nail salon.
One of the few personal services exempt from the RST is children’s face painting, according to a recent government tax bulletin.
The province has said it needs to extend the RST to these services to raise more revenue to beat down its budget deficit — the NDP has said it wants to be out of deficit by 2014. The estimated full-year revenue from the new measure is more than $106.5 million.
But critics say the measure is poorly conceived and has left hundreds of small businesses around the province scrambling to get their accounting processes in place so they can properly remit the sales tax they collect to the province.
They also complain they were never consulted on the changes and the extra costs it will bring them, which they add will be passed on to each consumer who walks through their door.
“The unfortunate part is that how the new tax will be handled hasn’t been explained,” said hairstylist John Unger of John’s Hair Designs on Sargent Avenue in Winnipeg. “It’s been poorly thought out.”
Unger said one glaring loophole in the new tax regime is that there is no definition for a haircut.
“What we could literally do is cut one single hair, which constitutes a haircut, and either give it away for nothing or charge one cent for it and it makes a cut and colour non-taxable.”
Without more specific rules in the new tax regime, some small businesses will start finding other ways around it to spare themselves bookkeeping headaches and to save customers money.
“It’s a tax that’s going to hit the middle and higher-priced salons and/or their clients a lot more heavily than it will their neighbourhood salon that has pretty low prices to start out with,” Unger said. “They might be able to provide a lot of their services tax-free which sort of gives them a bit of a benefit.”
The Opposition Progressive Conservatives say the new tax measures — which hit many insurance products July 15 — is Premier Greg Selinger’s version of a tax hike that isn’t a tax hike.
“Greg Selinger gave Manitobans his word prior to the election that he wouldn’t raise taxes when he needed their vote and now Manitobans are paying the price for that broken promise,” Brandon West Tory MLA Reg Helwer said. “We’re seeing the highest tax increase in over 25 years.”
But not all Manitobans will feel that new tax bite, some say.
They say that because most customers for hair and esthetician services are women, the vast majority of men will escape the tax by getting a haircut under $50.
“The average client walking in my door, 90 per cent of them are female,” Rituals In Hair and Skin owner Kristina Poturica said. “They’re not going to be certainly happy by paying seven per cent extra on everything they choose.”
Poturica and other salon owners say the new tax adds a double-whammy to their businesses as the minimum wage is set to rise by 25 cents an hour to $10.25 on Oct. 1.
They want the province to delay implementation of the tax to July 15, but the province has said that won’t happen.
Poturica and Tiber River Naturals co-owner Michelle Lalonde also said the new tax regime is so confusing that some accountants do not fully understand how it applies.
Plus, some have to produce new gift certificates to reflect the new tax, an added cost on top of putting new bookkeeping systems in place so they can accurately collect and remit the tax to the province.
“I do feel that they’ve put me in a really poor position,” Poturica said. “It’s going to be challenging.”
» Winnipeg Free Press
Republished from the Brandon Sun print edition June 30, 2012
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WINNIPEG — That new tattoo will cost more as of Sunday.
So will any haircut or styling that costs more than $50. So will any facial, pedicure and manicure or, if you’re so inclined, any scarification or body branding.
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WINNIPEG — That new tattoo will cost more as of Sunday.
So will any haircut or styling that costs more than $50. So will any facial, pedicure and manicure or, if you’re so inclined, any scarification or body branding.
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