DUTIES ON TOBACCO

Dominion, Volume 33, Issue 4, 29 September 1939, Page 6

DUTIES ON TOBACCO

Explanation Of Increases

PRICES TO THE CONSUMER

-Everybody will get a little out of it,” said the Minister of Finance, Mr. Nash, in explaining the effects of the new taxes on tobacco during the second reading debate on the Customs Amendment Bill in the House of Representatives yesterday. The duties were designed, he said, to give the local manufacturer and the local producer of tobacco more favourable treatment than the importer. The effect of the new taxes, the Minister said, would be to raise the price to the consumer by 3d. a two-ounce tin for tobacco and by Id. for every packet of 10 cigarettes. The increase in the cost of imported tobacco would be it lb, the figure including 1/8J in duty, 1.2 d. in sales tax, and 4.Sd. in retailer’s profit. The duty on New Zealand tobacco would be l/4.9d„ but to this would be added Id. sales tax, 4.8 d. retailer’s profit, and an additional .9d. to the grower of the leaf, a total of 1/11.6d. The added duty and sales tax would go into the war expenses account. Mr. Doidge (Opposition, Tauranga): The smoker pays and the non-smoker goes free. Mr. Nash: It is a purely voluntary tax. If a man does not want to smoke he does not have to pay the tax. The Bill provided a rebate of- 6d. a gallon on all motor spirit used for any purpose other than as fuel for road motor-vehicles, said the Minister. Motor spirit used for agricultural tractors and other farm purposes and for other industrial purposes including transport would receive a further rebate of 4d. Motor spirit used in aircraft and fishing vessels would receive a further rebate of 2d.

The Bill also gave the Government power to prohibit either the export or import of any goods, find further clauses removed any doubt of the validity of Orders-in-Council making regulations controlling imports because they left discretion to the Minister or other persons. One clause validated the "clearance of some kerosene pumps imported by an Auckland merchant so that there should be no suggestion of overriding the Court. When the 12/6 gold export tax was imposed by another Government, said Mr. Nash, gold was worth £6/3/1 in New Zealand currency. On the date of the coming into force of the new tax, gold was at £7/8/8, so that there was a fair margin. Returns from the taxes on beer, wines, spirits and tobacco might be below the estimates for the first six months, said the Minister, because clearance in anticipation of increased taxation had been heavy.