SALES TAX.

Press, Volume LXIX, Issue 20788, 23 February 1933, Page 13

SALES TAX.

~ IiISiCHANGBS IN THE BILL. JIAIN principles the same. ADOPTION BY THE HOUSE. [F*otf Ota Paruamntauy ItßroiiTKn.J WELLINGTON, February 22. gome important changes were made in'the Sales Tax Bill by the adoption pf new and redrafted clauses in the House o£ Representative thi3 afternoon. During the Committoe stages 68 Jy 0»e division was called for on the jupplsineatary clauses, tho majority of which appeared to meet tho wishes of the Opposition. The clause actually imposing the sales tax has been overhauled, although tho main principles hsro not been altered. In explaining the amendment of this ejjuso the Minister for Finance (the jgj G, Coates) said that as tho Bill was originally framed goods imported by wholesalers and retailers (irithiding manufacturing retailers), and J>y tho general public for their own ate wero exempt from the sales tax. Goods imported by a wholesaler for his . own use were in tho same position. Knee the Bill was introduced the.Gov(rnment had gone further into the matter JU>d had concluded that it would b* more satisfactory if tho Bill were 10 framed as to impose the tax in such 9*aes. It was not at present intended sat tbe sales tax should be collected on ovory packet, however small, imported liy post by private persons for their own l||* „ f Ti' k gopjuntt* Records Obviated. V)fr-Co*tea said that the Bill in its | uil&tl form provided that the sales life,goods made' by manufacturing *' trailers should be levied on the sale AUsA. I a another part of the Bill jt !, wok proposed that such manufacturing should be allowed to deduct fi'jfbtH tit tax payable on manufactured ' floods the amount of the sales tax paid Is io»p«« of any materials used by iifl the manufacture of those goods, si Jt was recognised, however, that if tlat provision had not been altered it ' would have beon necessary for' ihanu- .» ..faeturerii to keep separate records of tfcoM xpatemla upon which tax had • He* paid after February 8 and those ; ii stock prior to that date. The, pro- '' pOsats contained in the amendments enabled manufacturers either to deduct ■ from the sate value of the manufactured goods the taxable value of tho materials used or to deduct from the ' sales tax payable the tax already paid * 04 the materials. Another amendment to tho sales tax 1 elfcuio '-fu designed to ensure that w4e»'W'"aUoWa«ce was made on aceWHi ftf tajc on material the taxpayelr ;Wauldj ftoi'bjs able to deduct tho diißfOTfit or' any part of it a second time. &*{father aew provision enabled rdfand? of aqles tax to be made whero Ox material used in the makieg non-taxable goods. fietoimination of Bale Value. ' Several alterations have also been nln *fff another important clauso which the procedure for determining tN; viluo of goods for the purposes o£'t«x«tion. The object of one alterato provide that the tax shall bdvutffi on the credit price and not the 8? "trie*. In the original draft it !t that in the case of goods o New Zealand and entered msumption, tho sale value quivulent in New Zealand the value of those goods dttty, plua the amount of y payable, plus a further It is now proposed that cent, should bo increased License#, explained that it was eontho original provision did Ive justice between wholetailers. The new provision icept with the consent of Uer of .Customs, granted ich conditions as he thinks »n shall be' licensed as a nd as a manufacturing resame time. The" Minister at there were certain iirms land which were believed ilero in certain centres and manufacturing retailers in faa considered that as the inally framed it was doubta person couid be licensed ler or as a manufacturing ie centre without being reeing so licensed at all few Zealand. , fhe object •Htion wa.s to enable the to overcome that difficulty, ed in Committpo, the Min- > arranged for the deletion dice to securities when jeing granted. By another 0 selling or manufacturing an unlicensed wholesaler a breach of the law only xable goods are traded. Committee discussion the nised tu consider the questing costs to appellant if in his appeal against the f the sales tax made by Au amendment allow." >»ts to be obtained tn such a. A clause in the original t Bill enabled the Crown io sales tax from a person to a taxpayer. An amendts wages from that proPenal Olaussß. anges have been made in uses of the Bill. One atipuany information for an r tho proposed legislat&n 1 within five years of tho immission of the alleged fethcr amendment restricts ergons without warrant to endcrs about to leave New another amendment the t the Bill as introduced enk>» who had entered into t after the taxes were imI to the contract price the ny sales tax paid by !>im. !fson was, after tho introie resolutions, in a position linuelf, it was considered use should deal only with tered into before February to that effect had accordmade. The object of auaient wns to provide that a bould show on his Invoice t the tax payable on tho Minister said that w«e «d----)nly in the interests of the the goods and ot the Det to 'enable a manufaecr to know the amount of . paid on his materials for I im might be made. It wan

also proposer! to make provision for a vendor to recover tho amount of the tax shown on the invoice. A now clause provides that it shall bo an. offence to sot out on invoices an Amount representing the sales tax when such tax is not payable in respect to such goods. Refunds. With the object Of giving the taxpayer the benefit of tiny alterations made in the basis of taxation between the introduction of tho resolutions on February 8 and the passing of the Bill, a saving clause haa been inserted allowing collectors of Customs to make appropriate refunds. This has been made necessary by alterations made in the schedule of exemptions. The final amendment provides that all Orders-in-Council, -including regulations under the Bill, shall bo tabled in both Houses of Parliament within 14 days of being gazetted if Parliament is in session, otherwiso witnin 14 days of the opening of tho aossion. Provision is made by which tho House o.£ Representatives may decide that any such Order-in-Oouncil shall be rovoked or varied. In the event of that course being taken, provision is made for tho refund of tho excess sales tax. EXEMPTED GOODS. A REVISED SCHEDULE. [From Ota Parmamentaky llEroriTKß-j WELLINGTON, February 22. A revised schedule of goods exempted from the sales tax was announced by the Minister for Customs in the House of Representatives to-day. More items have been added to tho list of exemptions than havo been removed. It wfta announced last week that all book? would bo placed on the free list. Deletions accordingly include books for educational purposes, libraries, etc., and newspapers, while a now item has been added to exempt printed 'books, music ; and newspapers. Various detailed items exempting packing materials have been deleted, and two general headings to cover all containers have been inserted. Subject to these explanations tho revised list of, additions and deletions is as follows: Additions. Animal fata or oils, crude or rofifcod. Box strapping, metal suitable for binding cases, crates, and similar articles, also seals for use therewith. Candles, carbide of calcium. Chemicals, drug /, and similar preparations approved by tho Minister for Use in public and private hospitals, menial hospitals, and other approved institutions, whon such preparations are purchased exclusively for use thereat and not for resale. Coffins. Cornflour. Dairying machinery and appliances, namely vacuum pans, vats, or tanks other than those lined with glass, porcelain, or enamel (when sold to a dairyfactory or manufacturer of milk produets), also the following articles made of rubber identifiable as parts of dairying machinery, namely, inflation tubing, milking machine rings, washers, releasor connexions, and similar rubber fittings. Eggs, fresh or preserved, and egg pulp. Foods peculiar to use as stock and poultry foods. Cow, horse, and pig hair in its natural state. Hemp antj tow. Hides-, skins, and pelts raw. Hoop metal in shortv longths, specially suitable for wool baling or similar purposes. Horns, hoofs, and bones. Lime, including quick lime, slaked lime, and limestone. Malt. Milk and ci'eam cans. Pasteurised, powdered, condensed, or preserved milk, butter and milk powder. Cement-coated nails. Paper patterns. Postal franking machines. Rabbit poisons, namely, carbon bisulphide, phosphorised pollard, strychnine, and similar. Fowl grit. Sausage casings. Bodium chlorate. Spray pumps, foot or hand power. Tar. Water. Wood wool. Wool, greasy, aliped, scoured, or carbonised. Yeast.. The following additional classes of goods, whether produced or manufactured in New Zealand or imported which if imported would be included under the following items of tho Customs tariff: — ' . Rice, dressed or undressed, rice meal refuse, and rice meal. Anhydrous ammonia. Cotton piece goods, namely, tubular woven cotton cloth specially suited for use, as meat wraps, cheese bandages, or Ca paper n.e.i. cut or shaped for wrappers, boxes, and other receptacles. Cellophane, plain in sheets and printed 41 Paper, unprintcd, namely, true vegetable parchment, glazed transparent grease proof paper, grease proof imitation parchment paper, and similar paper of such qualities as may be approved by the Minister. Paper other than wrap»ina paper, waxed, unprintcd, also such paper printed and then waxed. Paper or cellophane wrappers, printed, lithographed or ruled n.e.i, Wrapping paper, printed or unprintcd. Punted book papers and music n.e.i. Cordage and twine suited for use as fishing lines and twine suited for use to tl.«• of ""'"Vil,"' 3 of qualities approved by* the Minister. > Deletions. Following are deletions from the lis*: Articles and materials for the sole use of a public hospital when purchased exclusively by such hospital and not for re-sale. , Lard and margarine. . , Materials used for packing goods which are exempt from the sales tax. Surgical, dental, and opticians instruments and appliances. Scientific and philosophical mstru ments and apparatus. Cylinders tor compressed gases. Electrical appliances peculiar to surgery, X-ray tubes. Artificers' tools. Bill hooks, bush hooks, slashers, and hedge knives. MEASURE passed. labour amendments defeated. • UMlbotD »•« »i»0CUT10» MPOWI ) WELLINGTON, February 22. In the House of Representatives today urgency was accorded the passage Sqlca Tax Bill. , Z e J'l.T £ at «tuW W.T v h®lcVanganui), Mr H. A. Wright wniSSS (Tnd., NoUon), - RUalnvorth fsj" B?r°i"i Mr .Air M n'ofAw/ Mnd' Southern Maori) join- ««"»» » v «" ns against it.

The committee then proceeded to deal with the schedule containing exemptions. Mr 33. J- Howard (Lab., ChtiDtchuroh South) moved to add bisciiits to the list, but his motion was defeated by 39 votes to 26. An endeavour by the same mem; ber to include confectionary wail defeated by 4l votes to 27. Mr c/Carr (Lab., Timaru) moved to include footwear. This WaS rejected by 41 votes to 2!). Mr D. W. Coleman (Lab., GisbOrfie) moved that soap be addod to the list. The motion was defeated by 40 votes to 24. ' , By 9.30 the committee had rejected attempts to include the following items in tho exemption list:—Washing blues by 42 votes to 24, crockery and cutlery by 40 votes to 20, all goods manufactured in New Zoalartd by 40 votes to 24, and tea and coffee by 41 votes to 24. A motion by Mr Barnard tq include pipe tobacco in the exemptions was rejected by 37 votes to 20. Efforts to include Currants, sultanas, stove brushes, enamels, polishes, etc., were similarl * ' unsuccessful. The succession of Labour motions was interrupted by Mr J. A. Ivash (C., Palmerston) to seeure the inclusion of colonial cement. His motion was defeated on the voiceß. The Leader of the Opposition moved to include ready-mado clothes, and on this being rejected by 38 votes to 21, Mr F. Langstone (Lab., Waimarino) sought a concession in respect to'native timbers. The motion was defeated by .">7 votes to 27, and a similar fate met Mr ,J. O'Brien 's plea on behalf of dredging machinery. Mr F. T. Tirikateno Bought the inclusion of Maori arts and crafts. Tho motion was allowed to be lost on tho voices. Attempts to secure exemption for baking powder and ice cream wero frustrated. Mr F. Jortos (Lab., Dun cdin South) sought exemption for drugs and medicines supplied by friendly societies. Mr Coates said that applications for a refu.id would bo sympathetically considered. The motion was withdrawn, and the Committee stage of the Bill was completed. Speaking on tho third reading tho Leader of the Opposition protested against the statement to the press hy Mr Forbes that more business would be conducted by Ordcr-in-Counci) in the event of a repetition Of obstruction tactics by the Opposition. He said tha statement amounted to a threat to destroy tho power of Parliament, ana declared that the United party had bee* elocted to office on a programme that directly opposed government by Order-in-Council. He characterised the attitude of Mr Forbes as highly dangerous ThO Bill was read a third time bv 37 votes to 23 and passed. dominion Manufactures.

REASONS FOR NOK-EXEMPTION. [F*ou Our Pa*i.um*nta*t lUi>o*m*.l WELLINGTON, .February 22. The reasons why the Government could not grant genoral exemption from the sales tax to all goods manufactured or produced in New ■Zealand were explained by Mr Coates during the committee stages of the Bill in the House tliis evening. , „„ Mr W. Nash (Lab., Hutt) moved as an amendment to the schedule of exemptions that "all goods manufactured or produced in New Zealand ' should be included. He urged tho claims of the secondary industries. "Tho effect of exemption would be immediately to place what is equivalent to a 5 per cent, primage on all imports from Great Britain," replied Mr Coaten. Mr C. Carr (Lab., Timaru): A good thing, too. Mr Coates added that the Government could and would not agree to a proposal which had this effect. The sales tat was a tax on all goods, and not to be used as a form of preferential tariff. The Government was already under an obligation to _ remove tho primage charged on British imports as aoon as possible. It could scarcely go ahead and add what was equivalent to further primage. For these reasons, said Mr Coates, the amendment could not be entertained by the Government. The Minister's remarks were criticised by the Leader of the Opposition (Mr H. E. Holland)> who said that although Mr Ooates refused the amendment on the ground that it would impose a further burden on British imports and clash with the Ottawa agreement, very recently by raising tho exchange rate he had imposed on British manufacturers what wan equivalent to a 15 per cent, increase in the tariff. Mr Coates: That is not bo.

Mr Holland: Maybe that i*» the Minister's opinion, but it is not the opinion of those who are acquainted tvith the ramifications of exchange. Mr W. A. Veitsh (0., Wanganui) said that at a time such as the present the Government must consider the manufacturing industries rather than importing interests- The indications were that limitations would be placed on tbe Dominion's exports of primary produce, end within New Zealand unemployment was increasing more than ever before. He urged that the amendment should be supported apart from party considerations. The amendment, was lost bv 40 votes to 24.

MANUFACTURERS 9 PROBLEMS. I DEFINITE RULINGS SOUGHT ON MANY POINTS. At the meeting of the Canterbury.' Manufacturers' Association last nigbt, consideration was given to several problems arising Out ol' tlia imposition of the sales tax. A number of letters were read from the Suw Z-ealand Jxanufactuiors u adoration dealing ivltn beverul questions sUoinULCU l>y UW UisSOUtltiOli. •Alio preaiueiu xiuicnuißoii^ aaiu laat u' great many points unu oeen raised unu bud not jei been ueflmtely dealt with, Tiio association was now attempting to get a schedule oi questions urawu up to which it was uoped definite replies would be obtained. There was the question whether tux was to be charged on orders not executed, or partly executed. A legal opinion was that tbe tax must be puid, but Air Coates bad stated in Parliament that such goods were exempt, and the Commissioner ot Customs field the sante opinion provided the goods were placed aside. It was desired to get definite answers on this and other points. Another question related to goods bought on letter of credit. According to a banker s opinion, goods so bought passed into the possession of the buyer at the port of departure, and were not subject to the sales tax. Mr A. G. Cannons said these and similar questions would come up m Wellington, and the association would get the full regulations. ■ Mr J. Murpliy said that he. supposed there woiild be the same leniency m respect of returns of sales tax as the case of income tax, and they Would be allowed to make Up their returns according to the date on which ea°" firm's month ended. Mr Cannons said that the first return was to be made up to February 28 Mr Murphy said that if that were insisted on it was going to increase clerical staffs.