B.C. will introduce a harmonized sales tax of 12 per cent, replacing the PST and GST effective July 2010, Premier Gordon Campbell announced Thursday morning in Vancouver.

The move will give the province the lowest harmonized sales tax in Canada, by combining the seven per cent B.C. provincial sales tax with the five per cent federal goods and services tax, said Campbell.

All other provinces with an HST, including a recent proposal by Ontario, have a rate of 13 per cent, he said.

"This is the single biggest thing we can do to improve B.C.'s economy," said Campbell.

The province estimated the HST will remove over $2 billion in costs for B.C. businesses,

Currently, Newfoundland and Labrador, Nova Scotia and New Brunswick have a harmonized sales taxes. Ontario is scheduled to introduce a harmonized sales tax on the same day as B.C.

Colin Hansen, B.C.'s minister of finance, called the PST "an outdated, inefficient and costly tax, some of which is hidden in the price of goods and services, and passed on to and paid by consumers."

Similar to the PST, consumers will see point-of-sales HST rebates on the following goods:

• Gasoline and diesel fuel for motor vehicles.
• Books.
• Children's-sized clothing and footwear.
• Children's car seats and car booster seats.
• Diapers and feminine hygiene products.