PRIME MINISTER RINGS IN NEW YEAR WITH GST CUT

GST DROPS TO 5%

Prime Minister Stephen Harper announced that starting January 1, 2008, the Goods and Services Tax will fall by another percentage point. As a result, from now on Canadians will pay only five per cent GST.

The Prime Minister, flanked by federal Finance Minister Jim Flaherty, made the announcement at the same Mississauga consumer electronics store where he originally promised to cut the GST during the 2005-06 election campaign. “This Government promised to lower the GST from seven to six to five per cent and today we are delivering on that promise,” Prime Minister Harper said. “The two-point reduction will save the average working family hundreds of dollars per year on day-to-day purchases, not to mention hundreds more on a new car or thousands on a new home.”

Reducing the GST from six to five per cent builds on the Government’s initial cut from seven to six per cent on July 1, 2006 and fulfills the campaign promise to lower the GST to five per cent. This permanent tax cut will benefit all Canadians regardless of age or income – including those whose incomes are too low to pay income tax. For consumers the total savings from the two per cent reduction will be almost $12 billion next year.

“Reducing the GST is part of our broader plan to ensure Canada’s long-term economic growth and prosperity,” said Prime Minister Harper. “Under our Government, taxes are headed only one direction: down.”

Since coming to office, the Conservative Government has taken action to cut sales, income and business taxes, reducing the overall tax burden for Canadians and businesses by close to $200 billion, and bringing taxes to the lowest level they have been in nearly 50 years.