Effect of sales tax outlined

Press, 14 August 1976, Page 3

Effect of sales tax outlined

.INZPA Wellington Many of the consequences of the Budget decision ,o introduce sales tax on industrial plant and equipment have yet to be fully realised and appreciated, according to Mr R. L. Southward, the president of the Manufacturing Engineers’ Federation. He was commenting yesterday on the impact of the Budget on more than 6000 factories in New Zealand and. in particular, the 2500 in the engineering and related fields. “When the Deputy Prime Minister (Mr Taiboys) addressed the Manufacturers’ Federation Council recently, he said the object of the Budget was to ‘discourage expenditure of foreign expenditure of foreign exchange.’ “This could have been achieved more directly and without the company administrative and bureaucratic costs by introducing a primage duty on imported items,” Mr Southward said. “Even more questionable is the application of sales tax to spare parts and. components. It is going to cost 1 mor? to keep our existing : machinery in good running order. This applies to the meat works, dairy factories, ' pulp and paper mills as well ' as the full range of domestic ! and support industries,” he said.