NEW SALES TAX.

Auckland Star, Volume LXXI, Issue 154, 1 July 1940, Page 8

NEW SALES TAX.

EFFECT ON PRICES.

MEASURE OF CONTROL.

SAFEGUARDS FOR PUBLIC.

(By Telegraph.—Parliamentary Reporter.)

WELLINGTON", this day

In connection with the increase in the rate of sales tax from 5 per cent to 10 per cent, the Minister of Finance, the Hon. W. Xash, said to-day that except for instances of certain trade groups, where resulting adjustment of prices was still under discussion, authority had been granted by the Price Tribunal to all retailers to treat the further 5 per cent sales tax as an authorised additional cost, thus permitting them to increase their selling price forthwith bv the amount of such additional cost.

Mr. Xash made it clear, however, .that the.se increases applied, only to goods delivered by manufacturers and wholesalers as from and including June 28 and consequently bearing the additional 5 per cent tax. Emphasising that it was an offence under the Price Control Regulations for re.tailere to effect price increases in respect to stocks which had been delivered before the date sales tax increase became effective, he 6aid that a eerious view would l>e taken of any such offence and that ae a routine measure it would be competent lor an inspector to insppt-t rele.vant invoice* in respect of which higher consumer prices were being charged.

The Minister went on to say that regarding some lines the manufacturers, importers and distributing agents, with a view to avoiding a rise in price to the consumer, might decide to reduce their last prices so that, when subject to the new 10 per cent sales tax, the new consumer price would be on the same level as that previously obtaining.

"Where this procedure is adopted, the authority given by the Price Tribunal to increase the prices to the amount of the extra 5 per cent sales tax will not apply," continued the Minister. "In cases where the adjustment to last prices is still nnder discussion, the general authority given by the Price Tribunal is issued on a provisional basis only, and subject to such variation as may be subsequently approved 'by the tribunal in consultation witi the manufacturers, importers and distributing, agents concerned. ,.