Quote:
Originally Posted by Mnementh
Who's claiming VAT isn't a tax? It is a tax, what it isn't is a sales tax. This seems to be what most people are misunderstanding. A sales tax is only placed at the end of the chain where the item is sold, VAT is charged all along the chain.
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I hate to tell you this but the old Canadian Federal Sales Tax was not broken out in the final price exactly like the VAT but it was charged on every transaction from the manufacturer to the final consumer. Much like VAT, you remitted/collected the difference between what you paid out and collected. Now we have the Goods and Services Tax which is not hidden but the processes remain exactly the same though we now have forms for claiming back GST for a lot of different reasons. If you have a strong stomach, check forms such as GST 300-7-6 and it's swarm of cousins.
Quote:
Originally Posted by Mnementh
You didn't read what I wrote, you've just basically said the same thing I did, at no point did I say that companies wouldn't raise the prices, I said it's not automatic. You've basically just said the same thing "the shelf prices would be replaced instantly" (paraphrased) implying that the prices have to be changed manually... because they do, it's not automatic. Most if not all companies WOULD increase their prices because of a VAT change but it's a manual process.
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More that I am disagreeing with the implication that the average person is too stupid to realize that when the VAT on a product being sold for dropped from 20% to 0% on a product being sold for £100 and the price charged to them does not change, the seller is now collecting £100 instead of £83.33 so their profit has increased by £16.67.
As for changing the price manually, that would only happen in a B&M shop that is not using a computerized scanning system and there aren't many of those left in my area. Online shops and most B&M shops will change their pricing in the store's management computers. In this area, quite a few of the shelf price tags in B&M shops are also computer driven so a few milliseconds to change them. As long as the price at the cash register is
lower than the marked shelf price, there is no issue.