Confusion over sales tax

Press, Volume CXV, Issue 33881, 28 June 1975, Page 17

Confusion over sales tax

By

ROBYN KING)

New sales tax regulations are confusing and complicated. according to many Christchurch retailers, particularly chemists. Some retailers fear that the Government is trying to price them off the market. New prices, caused by an increase in sales tax announced in the Budget, on a I range of goods from cos-' ;metics to firearms, are beginning to filter into many ; stores. Some prices changed .almost immediately after the Budget, as retailers bought lup more stock, but in other •areas, where goods are slow | moving, prices are only be- ! ginning to change. Cosmetics are the most inoticeable. An average container of talcum powder now costs about $2. whereas pre-'

'viously it cost about $1.65. A 4ft per cent sales tax has been imposed on all cosmetics and toilet preparations. The only items not , affected are soap and bubblebath liquid. One manager of a chemist shop felt that because of the higher prices, stocks would be much lower, and the same ; ranges of products would not reach shelves. “Chemists will start to cut • down on quantities and varieties.” he said. Other chemist’s shops said that they would keep up rhe same ranges and quantities as they had to. m an attempt to make a profit. In many shops the same product is selling at two different prices. One article at the old price and the other at the new. However, managers said that once they explained to the customer that

this was the effect of the sales tax regulations, all seemed Quite happy, if a little confused. Customers are not the only ones who are confused. Shop assistants and managers are finding the transition period a little trying. Many have found it easier to run stocks down as low • as thev can, mark the old stock that is left, and tuck the new stock behind it. Price lists have not been easy to understand either. In the record industry, different companies are charging different prices for wholesale goods. Retailers do not have; an easy job to maintain their own mark-up and keep differences in pricing down to a; reasonable level. Most retailers were critical of the Government’s imposing such harsh taxes, or any at. all. Many wanted to know what the Government thought the retailer was. im-; plying that all should take up a course in accounting to' cope with increased prices.' Cameras and photographic equipment, which'have a 50, per cent sales tax. film slide; projectors and accessories, which have a 50 per cent: sales tax, are slow moving: and little effect has been fett as yet. Many stores have; been using the new prices) to move goods more quickly i by launching a full-scale ad- : vertising campaign advertis-; ing the goods at the old price. • Films, however, are bought up rapidly, and they were • affected the day after the Budget announcement, caus- • ing many problems for assistants. Most stores have not reached the stage where half 1 of the goods are being sold ( at the old price and half at the new. They say it will, take about another two or) three months before everything will be at the new! price. Records which sold at $6.50, are. retailing at between $7.50 and $B. Retailers are unhappy as it is the second increase in seven months. ; They feel the Government is;

.trying to price them off the •market, and are applying to them to have the 40 per cent sales tax rescinded, as has : happened in the case of explosives, which had a 30 per cent sales tax imposed. Records: previously carried a 20 per cent sales'tax. Re- . tailers, through the Retailers’ Association and the Music Trade Association, are approaching Government about the sales tax. They claim that L'.N.E.S.C.O. recognises records as a cultural item. Therefore, since the New Zealand Government recognises U.N.- ; E.5.C.0.. records should not ! be the subject of sales tax. Gunsmiths are also unhappy with the change. A 30 per cent tax has been put on rifles, shotguns, and other' firearms. Retailers feel that the Government it hitting at the shooter. If it wanted to impose sales tax it should • have been on all sporting goods, they say. The prices of rifles and ■ firearms is being pushed up further, prices rising overseas by as much as 50 per ; cent. One large retailer said that firearms were becoming ■so expensive that they were ■ almost a luxury. However, it appears that: the customers are prepared: •to pay. Some are a little re-: ■ sistant to the changes, but; • do not blame the retailer. Re.-) ! tailers said it was too early to sav whether sales would; • be affected by the extra sales ’ tax. The 30 per cent sales tax I on explosives was rescinded ' after a special representation to the Government by the Aggregates Association. The national secretary of; the association (Mr C. I. Blin- j coe) said that the effect of the original legislation would have been to increase the; price of quarry products. “There would also have been a direct effect on the cost of concrete and. in a 1 large number of cases, I locally-produced concrete is] used to replace expensive im- j ported materials and this) helps to save overseas funds,” • he said.