The reason for the jackpot wins- a new tax break has led to record setting ticket sales.
For years Quebec calculated it’s Quebec Sales Tax (QST) including the amount of GST – basically charging residents tax on the tax they were paying.
The Federal government withheld transfer payments until the government stopped the practice. It meant $ millions in lost revenue for the province. Not they have implemented a way to recoup the losses through a lottery ticket program.
Customers who purchase lottery tickets don’t pay the sales tax
Beginning in 2017 anyone in Quebec who made a purchase of more than $50 at retail could be exempt from paying the provincial sales tax of 9.975% if they purchased $5 worth of lottery tickets. It is basically playing the lotteries for free.
The province has calculated that the lost tax will be more than offset by the increased lottery sales. The government already collects most of the revenue from lottery sales. The also economic boost when the winners
The big part which has paid off quicker than expected, is winning the jackpots. This money – much of it financed by lotto sales outside Quebec (like a transfer payment) is spent, invested and taxed in the province. The trickle down effect of a few hundred million dollars has a huge effect on the economy and makes this program payoff.
The key is winning Jackpots that come from tickets sold across Canada.
This radical program was implemented quietly by the Quebec Government allowing residents a chance to get hooked on it before it could be opposed. Word was spread quickly by retailers who make more money selling lottery tickets than they do collecting tax. The only problem is that retailers who do not have lottery sales are victims of tax discrimination. The government officials had not thought of this problem but will launch an app where customers can purchase their tickets online for this program.
If you are looking for a similar program in you province it isn’t likely to happen. Many provinces have implemented HST taxes which integrate the calculation provincial taxes and GST. This would make a program like this to complicated.
Other Provinces also have a much lower tax rate than Quebec so the numbers wouldn’t work. (See the tax rates in your province) The key financial point is in winning the Jackpots that come from tickets sold across Canada. If all the provinces hads a chance at winning it wouldn’t work as well.
For once the highly taxed Quebec residents are getting a break.
More Quebec Stories