Have you heard the good news about PST?
“Premier Moe made the important decision yesterday to reinstate the PST exemption on agriculture, life and health insurance. This is great news for Saskatchewan but it’s going to take time for insurance carriers to update their systems and reimburse taxes paid. We encourage everyone to patiently watch for updates as they come available. Thank you, Premier Moe! ” Deb Wiegers – Wiegers Financial & Benefits
PST Exemption on Life & Health Insurance
The Saskatchewan government is exempting the provincial sales tax on agriculture, life and health insurance premiums effective immediately.
“Our government will help families and small businesses save money, invest and help our province grow,” Moe said in a statement.
“Part of that commitment is to exempt agriculture, life and health insurance from PST.”
Moe said he heard business owners say that paying PST on group health plans may have resulted in fewer jobs being created going forward.
The change is forecast to have a $65-million financial impact on revenue forecast in 2017-18, down to $81 million from $146 million. This covers August 2017 until the end of March 2018. The financial impact for the 2018-19 budget is expected to be $120 million from a projected $240 million in projected insurance PST revenue.
Moe said the loss of revenue will be accommodated in his three-year plan to balance the budget.
“Our fiscal plan remains on track, even with this reinstatement of the PST exemption on crop, life and health insurance,” Moe said.
The exemption is retroactive to Aug. 1, 2017.
As for home and vehicle insurance, those are both sticking around. Finance Minister Donna Harpauer said money is part of the reason.
“It’s definitely significant financially, but we also looked jurisdictionally and we’re not standing alone in having a provincial tax on the other insurances,” she said.
Both Harpauer and Moe said future changes to taxation are ongoing discussions around the cabinet table when asked about potential future repeals of PST on home and vehicle insurance.
Opposition leader Nicole Sarauer said that if the Saskatchewan Party listened to residents prior to the previous budget when this PST was introduced there wouldn’t have been a need for this reversal.
“If they were actually listening to Saskatchewan people and business we would have also seen the walk-back for house and car insurance, for restaurants, for construction; both of which are taking a huge hit and are actually experiencing a slowdown,” Sarauer said.
Officials with the Ministry of Finance said they will be working with the insurance industry to determine the best way to refund people and businesses with PST that has been paid on agriculture, life and health insurance premiums.
More details are expected to be announced on April 10.
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