Businesses may have turned a corner after pandemic as outstanding unpaid sales tax falls in second quarter after peaking at $14,9-Billion in March, says CRA
Businesses are beginning to pay down the record sales-tax debt they have accumulated during the pandemic, new Canada Revenue Agency data show.climbed during the pandemicThe debt represents the amount of total sales tax that businesses had collected from customers and not remitted to the government. The mounting debt was a sign of broader financial distress because some businesses used sales-tax money to pay other bills instead of remitting it.
One reason is the increase in economic activity after lockdowns ended earlier this year. For example, sales in food services and drinking places plunged to $5.2-billion in January during the winter’s Omicron-fuelled lockdown, according to Statistics Canada. But sales rebounded in the spring to surpass prepandemic levels for the first time in two years, climbing to $7.4-billion in May.
Mr. Gill said he expects rising inflation could hamper businesses’ ability to pay down debt in future months.
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