THE PETROL TAX

Evening Post, Volume CVII, Issue 26, 31 January 1924, Page 4

THE PETROL TAX

The explanation of his petrol tax proposal made to the Farmers' Union by the Minister of Public Works served to correct some misapprehensions. The Minister placed the alternative proposals clearly: a double tire tax, a petrol tax, or a flat rate on cars. The objection to the flat rate is that it will have no relation to the use of the road, except that the man who has no car will pay no tax, and the car-owner will pay a tax which may be less or more than he should be called upon to pay. If the flat rate is sp low as to be fair to the occasional motorist whose car is in the garage five days out of seven, it will be too light for the owner who drives every day; if it is fair to the constant user, it will press too heavily upon the occasional driver. The tire tax and the petrol tax both establish a relationship between use and taxation. The petrol tax appears to find favour with the Minister, because it may be collected direct from the ultimate taxpayer, avoiding the middleman's addition to the tax. In support of his argument for the adoption of this tax the Minister yesterday quoted the practice in American States; but he did not refer to particular systems or show how exemption and collection difficulties were overcome. It would be helpful, we believe, if the Minister were to give such information. It is quite correct, as he stated, that conditions of use'in America resemble conditions in New Zealand more closely than those of any country except Australia; but conditions of supply are different. We import our petrol and could tax it at the ports. America produces the petrol locally and would have to impose an excise tax at the point of production, with the added complication of exempting the petrol destined for export and dividing the revenue among the States. These conditions may have influenced the'American States in their adoption of a " cross-the-counter " collection system. If the Minister can quote actual American experience it will be most valuable for guidance, both upon this question and upon the possibility of exemptions leading to evasion. We'are not opposing the petrol tax, but we see difficulties,, and we wish to see these disposed of, if possible, by full information and frank discus.sion. The discussion need not be prolonged. There is ample time before Parliament assembles to clear up outstanding points so that legislation may proceed without delay.