The New 2022 GST Canada Credit Increase: The Dark Truth
October 1, 2022 Andrew AdolphAudits
The new GST Canada Credit can provide Canadians with some pocket money this year. But does it come with strings attached?
Everyone likes free money, me included, but very little in life is free. When Justin Trudeau announced a new GST Canada Credit for Canadians, I thought of two things:
- It’s great for working-class Canadians to get some assistance.
- Why are they doing this?
As a former CRA auditor, the answer to question two came to me rather quickly. But before I get into my suspicions, let me break down what this new GST Canada Credit means for Canadians.
What Is The New GST Canada Credit
The government says increased payments would amount to $386.50 extra for a single parent with one child who earns less than $30,000 per year. A family with two children earning less than $35,000 would receive another $467.
These payments are meant to be delivered as lump sums before the end of the year, so long as the promised legislation passes.
For more info on the new GST Canada Credit, click here.
Why You Should Be Skeptical of The GST Canada Credit
With the good news out of the way, let me give my opinion on why the government is proposing these increased Credit rates.
They want you to file your income taxes.
The caveat that is not mentioned in most headlines is that you need to file your income taxes in order to claim these GST benefits. The trade-off is this:
They give you a small amount of money, and in return, the Canadians that get this credit will have to file taxes they can ill afford. Sure, you get some money out of this whole thing, but is it worth hiring an accountant and filing taxes if you don’t have to?
Do you Need help Understanding The Canada GST?
If GST tax is confusing to you, I’d advise you to check out this blog on the GST Quick Method. The GST/HST quick method offers several advantages, such as less paperwork and less time calculating the net tax for GST/HST purposes. However, if you own a business, once it reaches a certain size, consider reverting to the general method to secure all input tax credit entitlements.
GST Canada Credit and The Bottom Line
Knowing taxes inside and out can save you a lot of money. The problem is not too many people are auditors, so it’s only natural to miss some key areas where you could be saving money.
That’s where I come in.
I was a CRA auditor for over a decade, but now I’m on your side. Shenanigans like the one I just talked about in this blog happen all the time. The CRA is always after your money; I keep them away from it.
If you have other questions about taxes and compliance, call 604-204-6173 or email firstname.lastname@example.org to book a free online meeting. You can also visit the Blog for additional tax-related resources.
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Andrew Adolph is a CPA and former CRA auditor with 25 Years of experience. He helps businesses to not par any more in sales taxs than the law says they must and acts as an advocate for you if you are being audited, so you can fous on your business.