National Party looks at other indirect taxes

Press, 30 August 1985, Page 4

National Party looks at other indirect taxes

PA Wellington The National Party is considering methods of indirect taxation that would be simpler and cheaper than a goods and services tax, says the Opposition’s finance spokesman on revenue, Mr Michael Cox. GST would be inflationary, expensive to implement, and would increase the number of public servants, Mr Cox told a GST seminar at Auckland University. National was considering alternatives for later policy statements, he said. One was a direct expenditure tax which would tax the discretionary spending of

any individual after the payment of direct taxation and the net capital payments made by that person. It would be at a lower level and would be paid annually. “It is a simple form of taxation and could replace much of the regressive effects of a goods and services tax,” Mr Cox said.

A second alternative was a simplified expansion of wholesale sales tax.

Only about 10,000 people were in the wholesale sales tax area and that would reduce much of the compliance costs associated with GST.

Mr Cox said he agreed

that the present wholesale tax base was unnecessarily complex and would have to be simplified.

A third alternative was a move to a retail sales tax where the consumer continued to pay an equivalent amount on goods and services. “But the extremely complex and costly process of calculating that taxation process through a goods and services tax would be removed.” Mr Cox said there were problems in capturing the same amount of taxation through a retail sales tax, but those would have to be weighed against the compliance costs and “clumsiness” of GST.