Sales tax drop sought

Press, 18 May 1982, Page 25

Sales tax drop sought

The New Zealand Computer Service Association will make submissions to a public hearing on July 6 endorsing the recommendations made by the Industries Development Commission in a draft report on the electronics sector. The managing director of Computer Consultants, Ltd. (Mr K. E. S. Fraser) said that the report appeared to make very sound proposals. Among recommendations was a reduction in the 40 per cent sales tax on computers to 10 per cent, the introduction of a 40 per cent investment allowance and sales tax remission on new plant and machinery for approved industries, the establishment of a $5 million electronics investment fund and the provision of $1.5 million annually for research and development. Mr Fraser said that the NZCSA would be make submissions to the public hearing of whole hearted endorsement. The association had been pressing for a relaxation in sales tax for some time, as had his own company. _____

Although a change in government philosophy to allow special tax incentives for one industry may be more difficult to achieve, he said he hoped the Government would listen carefully and act quickly on at least some of the recommendations. A relatively minor (compared to other areas) cash injection could have dramatic effects, especially in exports. He believed the commission was right to emphasise the prospects of the microcomputer industy and product development. Software also had tremendous potential, he said. Other recommendations in the report are that overseas investment should be encouraged in the high technology area; that a grant should be paid to encourage local production of computers; that there should be frontier protection in the form of interim tariffs and import licensing; that there should be protection against dumping and that imported products should meet local safety standards.