Sales tax is a consumption tax imposed by governments on the sale of goods and services. It is typically added to the purchase price at the point of sale and collected by the seller on behalf of the government. The customer pays the tax, and the business is responsible for remitting it to the appropriate tax authority.

In Canada, sales tax can take different forms depending on the province:

• GST (Goods and Services Tax): A federal tax of 5% applied across the country.

• PST (Provincial Sales Tax): Charged by some provinces separately (e.g., 7% in British Columbia).

• HST (Harmonized Sales Tax): A combined federal and provincial tax used in provinces like Ontario and Nova Scotia.

Sales tax applies to most goods and services, though some essentials, like basic groceries, prescription drugs, and certain health services, are often exempt or zero-rated.

Businesses that meet specific revenue thresholds must register for a tax number, charge the appropriate sales tax, keep accurate records, and file regular tax returns. Failure to comply can result in penalties.

In summary, sales tax is a key source of government revenue and an important responsibility for businesses. Understanding how it works ensures compliance and smooth financial operations.