It’s too early to assess the financial impact of the new federal luxury tax launched Sept. 1 on the auto retail sector but after two quarters living with it, the association representing Canada’s franchised dealers says it’s become an administrative headache.
The tax has created uncertainty about how it should be applied, said Charles Bernard, lead economist of the 3,400-member Canadian Automobile Dealers’ Association (CADA).
“The main problem with the tax has been the administrative burden that came with it,” Bernard told Automotive News Canada.
“It was a mess. When it came out even the people at CRA [Canada Revenue Agency] didn’t know exactly how the law works. It came in in early September and even after Christmas people at CRA were still getting hammered with questions.”