Transfer tax seen as absurd

Press, 2 December 1985, Page 6

Transfer tax seen as absurd

PA Auckland The Democratic Party’s proposed transfer tax is absurd, says the Minister of Finance, Mr Douglas. He said last evening that his office would analyse the idea 1 “to show why it is wrong.” ’ “Quite simply, it is a nonsense. I hardly have any view on it,” Mr Douglas' said. ' k , .

An Auckland economist, Dr Don Brash, said Democrats were dreaming if they believed their tax would work. Financial transactions would stop “stone dead” if a transfer tax were applied. Dr Brash, chairman of the Government’s, . advisory panel on; GST,. also , con- , tested the Democrats’ saying that GST compliance costs were high. He said the party made the error of. comparing it with the British VAT system, when it was. radically . different The transfer proposal reflected the Democrats’ “total lack of contact with commercial reality.” Jo. suggest that businesses would help fund a campaign . to stop GST in favour of a " new tax ..which hit profits was crazy, Dr Brash said? The chairman of. 4 Auckr"'; land regional Chamber of.. Commerce, Mr Geoffrey. Clathworthy, said businesses would be wary of ‘any proposal which., shifted the tax incidence to the corporate sector. ' “We need to look at the details carefully to see what the implications are for business,” he said. Earlier report, page 2