Duty change may hurt

Press, 14 August 1980, Page 1

Duty change may hurt

New Zealand overseas travellers buying duty-free “sight' and sound” equipment after October ■ 1 may be in for a shock when higher. Customs charges take effect from that date.

In many cases travellers will be better off buying the goods in New Zealand at retail prices. The manager of one duty-free camera shop in Christchurch described the new system of dutyfree allowances announced by the Government at the end of July as an “absolute shocker” for the New Zealand traveller. After October T a new concession will apply to cameras, radios, and sound equipment. The first. $5O worth of these - goods will be free - of duty and sales tax. After that,-, a combined duty and sales tax of between 90 and 126 per cent' will be payable on such goods. The manager of Pan Pacific Cameras ■in Colom-

bo Street (Mr D. W. Ward) said that in many. cases travellers would .be .no better off buying cameras ' duty-free than they would be if they paid the retail price. Camera prices were becoming “fairly competitive” as stores offered more specials and discount prices on them. A Pen tax ME Super camera sold-in New Zealand at a recommended retail ..price of $789. The duty-free price -in New Zealand was about $369 — after duty the price would rise to about $6OO, Mr Ward said. In the last two weeks at least three persons travelling overseas had bought cameras at retail prices from the store rather than face heavy customs duty on their return. “Nobody . is very pleased' with . the new system at all,” Mr Ward said. Travellers would have to make sure, they had enough money on their re-

turn to pay the Customs charges. Mr Ward said that he thought people would shy away from buying more expensive cameras dutyfree. Some savings could still be made on less expensive cameras bought duty-free, although not much.

“The only real savings are going to be on film which is still cheaper duty-free.” The present concession, which allows the first $5O worth of accompanied goods free of duty and tax, with a 25'per cent flat rate on the next $lOO, will still apply to other goods after October 1.

After the first $5O, radio products will attract a combined sales tax and duty of 126 per cent of their wholesale value in the country of purchase; cameras will attract 90 per cent; amplifiers, 98 per cent; speakers, 99 per cent; tape recorders, 105

per cent; and television sets, 126 per' cent. There will be no $5O reduction available on television sets.

The owner of. one camera store in Christchurch said that the new system meant that duty free perks for the .overseas : traveller were “drying up.” However, most duty free camera stores in Christchurch sell goods at retail prices, and so they say their businesses will not be badly affected by the changes after October 1. The managing director of the Christchurch International Duty Free Shop (Mr J. A. Schneideman) said that the changes would probably not affect his business, as the store sold a wide variety of goods, apart from sight and sound equipment.

He contended that it would still be worth while for the New Zealand traveller to buy duty free goods. Admittedly, some travellers would be worse

off after October 1, but others would be better off. The Minister of Customs (Mr Templeton) asserts that the change in the duty free allowance system was not intended as a “revenue gathering exercise.” The amount of duty paid by travellers after October 1 would depend on the type and quantity of goods' brought back, hp said. It was not possible to estimate changes in the revenue yield. This had not been a major consideration. The changes were not directed specifically at spending ; , on cameras, radios, and stereos, but he

acknowledged that buying these items duty-free would become less attractive once the SSO free limit was reached. Travellers could still import a “reasonably good” radio or tape-recorder free of duty and sales tax while keeping their present entitlement on other goods.

The exclusion of stereo equipment and more than one radio from the present $5O concession had been withdrawn, so that buyers of these goods would benefit, said Mr Templeton. A point which seemed to have been overlooked was that the “two-tier concession system” would allow a total exemption of $lOO dut” and sales tax, instead of the present $5O, if both concessions were used to the full.

The Government recognised that the new allowance system would have some adverse effect on duty free shops, he said, although the impact would probably not be great.