Sales Tax, Duty On New Cars Substantial

Press, Volume CVI, Issue 31230, 30 November 1966, Page 12

Sales Tax, Duty On New Cars Substantial

The buyer of a new car seldom realises how much of the price he pays represents duty and sales tax passed on to the customer. Calculation of this is complicated, hut the Customs Department, which is the collecting agency for both, works to a formula.

Duty was based on the current domestic value of the vehicle, which generally speaking was the wholesale price in the country of export, said the Collector of Customs at Christchurch, Mr F. O. Spackman. The actual duty paid, however, varied according to whether the car was imported built up, or in a knocked down condition, i.e., assembled in New Zealand. And it was more for cars from the United States and countries described as foreign, than for vehicles imported from the United Kingdom and Australia. Duty payable on United States and foreign cars was 45 per cent of the current domestic value for those imported knocked down (55 per cent built up). For cars from the United Kingdom and Australia, imported knocked down, duty is 61 per cent (20 per cent built up). Sales tax, at the rate of 33 1-3 per cent, was based on the value of the car when sold to the retailer in New Zealand. (At this stage, duty has already been paid, and the calculation is made on this price which is inclusive of duty.) When asked for examples of amounts of duty and sales tax payable on new cars, even on hypothetical values, Mr Spackman replied “The actual amounts of duty and sales tax payable in respect of particular cars would have to be ob-

tained from the motor companies concerned.”

“The Customs Department does not have details for individual cars, and in any event is not in a position to give such information, as the charges are calculated on values supplied to the department confidentially.” Asked for details, the representative of one Christchurch motor firm, gave the following figures: Foreign car retailing new (imported built up) at £1867; duty, £357; sales tax, £416. United Kingdom car (also built up) retailing new at £2300; duty, £208; sales tax, £516.

Another motor firm representative said of a new vehicle price of £1143 (imported knocked down from Australia), sales tax was £251. He could not supply a figure for duty. A third motor firm said that a six-cylinder car in Britain retailed at £832, plus £l9O 13s 4d, United Kingdom purchase tax, making a total selling price in the showroom of £1022 13s 4d. The retail price of the same car in New Zealand, imported in a knocked down condition, was £1434. Freight on this vehicle would amount to around £l4O.