TORONTO - A lobby group representing small businesses says its members are very worried about Ontario's plan to harmonize its provincial sales tax with the GST.
Many large companies and the Chamber of Commerce support the plan to switch to a single, 13 per cent sales tax in Ontario, which they say will lower their costs and prices for consumers.
However, the Canadian Federation of Independent Business says smaller businesses are worried about charging consumers such a high sales tax on their products or services.
A survey of 3,000 small businesses by the CFIB found 75 per cent fear the 13 per cent tax will be a big negative for customers.
Revenue Minister John Wilkinson says the report shows people don't understand that the Liberal government's tax reform package includes an 18 per cent cut to the small business tax rate.
The survey found 44 per cent of small businesses who responded believe the higher single sales tax will trigger growth in the underground economy.
Both Ontario and British Columbia plan to merge their provincial sales taxes with the five per cent goods and services tax starting next July.
