SALES TAX UNPAID

Evening Star, Issue 22070, 2 July 1935, Page 10

SALES TAX UNPAID

. REPORTED PROSECUTION DF DUNEDIN TAILORS CRITICISM OF DEPARTMENTAL METHODS The attitude of the Dunedin Master Tailors’ Association in regard to the payment of the sales tax was discussed by Mr T. Jenkins this morning in relation to a message from Auckland which stated that, according to advice received by the association in that city, a test case will probably be brought by the Customs Department against the Dunedin Association for non-payment of sales tax. In the message from Auckland Mr H. N. Preston strongly criticised the action of the Dunedin tailors in refusing to pay. “ The Auckland Association been dissatisfied with the basis on which tailors have been _ required to pav the sales tax over since the Act was passed,” Mr Preston said. He emphasised the point, _ however, that the Auckland tailors did not approve of the policy of the Dunedin tailors in refusing to pay the tax, and said he believed that upder the law the department was entitled to claim payment. The Auckland Association considered that the Customs Department was one of the most reasonable of the Government departments, and felt that relief could best be obtained by an approach along constitutional lines. “Mr Preston expresses his own opinion based on surface appearances, commented Mr, Jenkins. “ Like many others, he mistakes departmental regulations for law. It is the lawabiding nature of the pdople which lets a department go dangerously near infringement of constitutional law. The tailors throughout the dominion have refused to pay on the ground that they do not qualify as payers of a second tax. Many appeals have been made to the department against the harshness of the taxation, which is Is 5d on every £of wages. Balance-sheets were shown to the Minister proving the impossibility of paying the double tax amounting to another rent, and his reply was that the Government nfeeded the money. When the then Comptroller of Customs was asked how the department reconciled the tax with the clause in the Act he said ‘ such and such was possible * and ignored the other part of the clause, which read ‘ iti the ordinary course of business.’ Clause 13 (b) of the Act reads: ‘ln the case of goods manufactured by a manufacturing retailer, the sale value shall be the fair market value of such goods as if they were sold by a manufacturing retailer to a retailer in the ordinary course of business.’ “So much for the department’s sense of fair play,” continued Mr Jenkins, “ but what about its failure in duty whep it has failed to collect the duty for over eight months? A court case could apprise the public that the excess of sales tax returns must have come from retail business, ‘ as everything possible is taken in the tax from wholesaler and retailer. The Hon. Adam Hamilton stated publicly that it was not wise policy ‘ to let the weakest go, to the wall and let the strongest survive.’ It would be interesting to know how he reconciles his statement with the working of the sales tax on the small creative trades. Experience has shown that limited liability concerns, with their dispersed authority in management, are incapable of training hoys ui trades. Such training must be done by a creative tradesman, a very different condition from the tinkering in putting ready-made parts together, and called modern trade training as taught in technical schools. A great change is caused by substituting the ready-made part instead of the ability to make that part and be independent of the machine. So in educatipn the practice of supplying pre-digested knowledge obviates the use of the creative faculty, which is the educative ° U Mr Jenkins said that the sales tax involved the principle that taxation was not legal outside the provisions of the Act as laid down by Parliament. As no provision was made for appeal, except the farcical one to the department concerned, they had adopted the practice of the patriots’ The department’s policy was one of conciliation with the individual, explaining the remark of the former Comptroller of Customs that Mr Coates objected to so milch publicity. “ The next move, that of prosecution, is the duty of the department,” stated Mr Jenkins. “ The department should also state whether Parliament was told that the tax was to be one between wholesale and retail only. Another question is: Why is the tax -charged differently on different manufacturing retailers?”