TORONTO -

In news revealed this week, the 12-percent tax on the private sale of used cars will not be tamed down to 7 percent when the Harmonized Sales Tax is phased out come April 1 in British Columbia.

Many dealers and private sellers had been following this development with bated breath when CBC News reported the verdict on Wednesday.

British Columbia’s finance minister Mike de Jong appeared on CBC news and offered an explanation for the government’s latest move in the automotive market.

The finance minister explained that one of the reasons the government is not cutting down the tax on used vehicle sold privately is to “keep the tax in line with the 12 per cent tax on all new and used vehicles sold by dealers,” CBC reported.

Basically, this ruling makes sure the used-car sales playing field remains even for dealers and private sellers.

“Before the HST was brought in July 2010, there was only a seven per cent PST (provincial sales tax)on the sale of used vehicles by private sellers when the price of the vehicle was less than $55,000. All cars sold by dealers were taxed with an additional five percent GST (general services tax), for a total of 12 per cent sales tax,” CBC News reported.

"We made the decision to eliminate that differential, and it really wasn't tied to whether we were in a HST or PST regime," de Jong said

Keeping this tax in place is estimated to generate $45 million in additional revenue for the province this year, CBC reported.

To view the CBC news report, see below: