Advice to car companies

Press, 19 August 1982, Page 2

Advice to car companies

PA . Wellington Some car companies will have to adopt different trading and tax paying practices if they want to keep car prices down, said the Minister of Customs (Mr Allen) yesterday. Mr Allen was commenting on statements made recently by companies that the price of some new cars would increase by several hundred dollars under new tax provi-

sions announced in the Budget. The increase would not apply to companies receiving cars direct from manufacturers.

In 1974, when sales tax legislation was revised, some companies had devised a procedure to defer sales tax payment. They had formed separate wholesale outlets through which vehicles nominally, passed on the way from manufacturer to retailer.

These "paper" outlets paid the sales tax on the vehicle, Mr Allen said.

Changes in the 1982 Budget mean the “paper” companies have to pay sales tax on freight costs, whereas retailers who receive cars direct from the manufacturer do not.-

Mr Allen said companies could save up to a third of the increase they claimed would occur by cutting out the “paper” companies. “The choice is one for the companies to make when exercising their business judgment. They certainly cannot blame the clarity now available in the sales tax legislation as the sole reason for any price changes in motor vehicles,” he said. First woman Brazil got its first woman Cabinet member yesterday when President Joao Figueiredo picked Professor Ester Figueiredo Ferraz to be Minister of Education. Professor Figueiredo Farraz, aged 67. was a member of the Federal Education Council. — Brasilia.