SALES TAX

Gisborne Times, Volume LXXIII, Issue 11877, 23 February 1933, Page 5

SALES TAX

, '.i

HOST OF amendments

FOR PRIVATE :JffUSE>

IMPOST NOW TO BE LEVIED

(Press Association.)

WELLINGTON, Feb. 22

Some important changes to the Sales-Tax Bill. have been -.made as the result: of re-drafted clauses brought down in the House of Representatives by Governor-Gener.il’s message to-day., ’-., .

The clause actually imposing the. sales tax has been extensively overhauled, although the main principles have not been altered.

Explaining- the amendment, Mr. Coates said that as the Bill was originally, framed, goods - imported by wholesalers and. retailers, (including manufacturing retailers) and by the general public for their own use, wore exempt from the sales tax. Goods imported by a wholesaler for his own , use; were in the same position. Since the Bill was introduced the Government had gone further into the. matter, and had concluded' that it would be more satisfactory if the Bill were so frame as to impose ai tax in such eases. No doubt cases of difficulty, administrative, and otherwise, would occur under the amended proposals, but any such matter could be dealt with as it arose. It was not at prejsent intended that the sales;, tax should be collected on every packet, however, small, imported by post by private persons for their own use. It was considered that the cost, of collection in such-cases would probably bo greater than tho tax which would bo collected. That matter, along with many others, would he gone into as soon as the Bill was passed.

CONCESSION TO MANUFACTURING RETAILERS, ■

Continuing, the Minister said that the Bill, in its original iform, provided that the sales tax on goods made by manufacturing retailers Should he levied on the sale value. In another part of the Bill it was proposed that such manufacturing retailers should be allowed to deduct from the tax payable on manufao tured goods tho amount of the sales tax paid in respect of any materials used by them in the manufacture of

those goods. It was recognised, however, that if that provision had not been altered, it would have been necessary for manufacturers to keep separate records of those materials upon which the tax had been paid after February 8, and those in stock prior to that date. The proposals contained in the amendments enabled manufacturers either to deduct from the sale value of the manufactured goods the taxable value of the materials used, or to deduct from the sales tax payable the tax paid on the materials. The new provision would be a great assistance to retail manufacturers. THE TAXATION ON MATERIAL. . Another amendment to the sales pjx clause was designed to ensure that- where allowance was ma,..e an account of the tax on material, \ne taxpayer would not be able to deduct the discount, or any part of it, a second time. A /further new provision enabled refunds of the sales tax to be made where warranted on material in the making of nan-taxable goods.

RILE" VALUE O'F " GOODS. Several- alterations had also been made to another important clause, which sets out the procedure for < termiuing tie sale value of gooc for the purposes of taxation. The object of one alteration is to pro vide that the tax shall he paid on the credit price and not the eas price. The Minister said that if this were not done, it woulcv cause giave inconvenience to recognised commercial practices throughout the Dominion. In the original draft, it was provided that in the case of gooas imported into Now Zealand and entered for home consumption, the sale value should be the equivalent in New Zealand currency, of the value of those goods 'for Customs duty, plus the amount of Customs duty payable, plus a further per" cent. It was now proposed that this 20 per cent, should be increase to 25 per cent. The Minister explained that it was considered that the originalprovis ion did not do relative justice, between wholesalers and. retailers.

. MUST BEI WHOLE'S AUER OR Jf MANUFACTURING RETAILER.

A new provision states that, except with the consent of the Comptroller of Customs granted, subject to sue conditions as he thinks fit, no P®** son shall he licensed as a whol - saler and as a manufacturing retailer at the same time. .The. hliniST ter explained , that thebe were cei tain firms in New Zealand respecting whom it was believed they were wholesalers in certain .centres, and retailers or manufacturing re 1 > in others. It was considered . .that the Bill was originally framed, it was doubtful whether such a person could be licensed as a wholesaler or as a manufacturing retailer at one centre without being regarded as being so licensed at all centres ! n ev/ Zealand. The object of the alteration was to enable the Department to overcome that difficulty.

As promised in committee, the Minister has also arrangeitfor the deletion of the:; reference j.to ; security ies when licenses are being granted. alteration, the selling or Manufacturing cIL goods by an unlicensed wholesaler shall mvo v ® a breach of the law only when taxable goods - ar© traded.

% COSTS .'TO SUCCESSFUL ■ APPELLANTS. •« v

■ .During the committee discussion, the Minister promised to consider the question, of allowing costs to an. appellant if lie succeeded in an appeal against tho assessment' of sale tax made,by the Collector. An amendment allows reasonable costs to he obtained' in such circumstances.

A clause in the original draft of the Bill enabled the Crown to recover. the sales tax from persons bw- . ing money to the taxpayer. An amendment.-exempts wages from that provision. . • . PENAL CLAUSES. - -Several changes .have been made in the penal clauses of ; the Bill. One stipulates , that, any, information, for an offence under the proposed legislation must be laid . within five -years of tlio date of the commission of the alleged* Another amendment, restricts the arrests of persons without warrant, to suspected offenders about to leave New Zealand. POSITION OF CONTRACTS. Explaining another amendment, the Minister said that the Bill as introduced enabled a person who had* entered into -an agreement after the taxes were imposed, to add to the contract prices the amount of any sales tax paid by him. As every person was after the introduction of the resolutions, in a position to protect himself, it was considered that the clause should deal only with contracts entered into before February 9. Provision to that effect had accordingly been made, WHOLESALER MUST SHOW TAX ON INVOICE.

The object of another amendment was to provide that the ■wholesaler should show on his invoice the amount of tax payable on his goods.

The Minister said that that was advisable not only in , the interests of the purchaser of the goods and of the Department, but also to enable the marujfacuring retailer to know the amount of tax actually paid on his materials, for which a claim might he made. It was also proposed that provision should be made by which the vendor might recover tho amount of the tax shown on the invoice.

The Minister said it was understood that in Australia certain retailers refused to pay the sales tax to wholesalers until a similar provision was inserted* in the Commonwealth law. Now the clause provides that it shall be an offence to set out on the invoices an amount representing the sales tax, when such tax is not payable in respect to such goods. Mr. Coates said it had come to the knowledge of tho Government that certain business firms were issuing invoices showing as tho sales tax amounts in excess of those actually paid or payable. With the object of giving the taxpayer the benefit of any alterations made in the basis of taxation between the introduction rtf the resolutions on February S and the passing of the Bill, a saving clause lias been inserted allowing Collectors of Customs to make appropriate refunds. This has been made necessary by alterations made in the schedule of exemptions. ORDERS-IN-COUNCIL TO BE TABLED IN PARLIAMENT. The final amendment provides that all Orders-in-Council, -including regulations under the Bill, shall be tabled in both Houses of Parliament within 14 days of being gazetted it Parliament is in session, otherwise within 14 days of the opening of the session Provision, is made by which tho House of Representatives mb decide that any such Order-m-Coun-cil shall be revoked or varied in the event of that course being taken. Provision is also made for the refund- of excess sales, tax.

REMOVAL FROM EXEMPTIONS. gome of the more important items removed from the list of exemptoi from the sales tax are:— _

Surgical, dental and opticians' uv strum ents and appliances. Scientific instruments and appli-

ances. Artificer's tools. Margarine. ADDITIONAL EXEMPTIONS. Various detailed items exempting packing materials have been delete, and two general headings to covei all containers have been reinserted. Books for educational purposes, libraries etc., and newspapers have been omitted from the schedule, and a new item to exempt printed books, music and newspapers, has been included in the exemptions. Some of the more important items added to the list of exemptions from the sales tax are:— ; Coffins. Tombstones. , Stock and poultry foods. Hemp and tow, tallow. Sausage skins.. Wool, hides, skins and pelts. Corn fi'our. Eggs (fresh, preserved and pulp-

ed).' Lime. Meats (cooked), and cheese. Bandages and caps. Cordage and twine suited for fishing lines and nets. Yeast. Milk and cream cans. Malt. Candles. . Certain dairying machinery anc.' appliances, _ - - 1 Postal Franking machines. ' Tar. y V;

HOUSE RESUMES DISCUSSION

LABOR CONTINUES OPPOSITION.

PLEAS FOR VARIOUS

EXEMPTIONS

MR. COLEMAN WANTS SOAP ADDED TO LIST. amusing argument ■ FOLLOWS. y ; (press Associations WELLINGTON, Feb. 22. In the House of Representatives this afternoon ; urgency was, . accorded the passage of the Sales Tax Bill. : ' ' 7

'Amendments to the Bill ivore introduced by Governor 7 General’.s message, and adopted. The only case in which a division was forced, was on the clause actually imposing the sales tax. It was retained by 43 votes to 28, Messrs. Veitch (O.), Wright - (C.), Atmore (I.), Wilkinson (I.), Rushwofth (C.P.) and Tirikatene joining , the Labour members in voting . against it. ■ • The committee then proceeded t* deal with the schedule containing exemptions.

Mr. Howard (L.) moved to add biscuits to the list, hut liis motion was defeated by 39 votes to 26. An endeavour by the same member to include* confectionery was defeated by 41 votes to 27. ■ Mr. Carr (L.) moved to include footwear. This was rejected by 41 votes to 29.

Labor’s efforts to havo various items added* to the list of exemptions from tlio sales tax were continued when the ; HouSe resumed in the evening.

Mr. Coleman (L.) moved that soap be added to the list. Ho said lie felt sure that the Government haev omitted it in error.

Mr. Coleman was supported in his plea by Mr. Lee (L'.) .who said, “Tho Bible lias been exempted. Everyone knows that cleanliness is next to godliness, and I appeal to the Government to place; soap on the list right under the appropriate item.” Ho trusted that the Government did not want to relegate New Zealand to the ranks qr the “great unwashed.” Mr. Langstone (L.) said the difference between civilised and uncivilised countries was that the people in tho former countries used' soap. “I am afraid if tho tax is applied to soap it will not he used as much as formerly,” be added. “This might result in an epidemic and the Minister himself might be a victim.” The Chairman (Mr. Smith): “Order! This is not the time for levity.” The motion was defeated by 40 votes to 24.

SI AD PICTURE OF TEALESS AND TOBACCOLESS HOMES

By 9.30, the committee had rejected attempts to include the following items in the exemption list; Washing blues, by 42 votes to 24; crockery and cutlery, by 40' votes to 26; all goods manufactured in New Zealand, 40 votes to 24 ; tea and coffee, 41 votes to 24. Mr Carr, pleading on behalf of tea, said when a wife, found thatt owing to various forms of taxation she was unable to obtain a cup of ten, and when her husband for the same reason was unable to obtain tobacco, it was possible that all sorts of domestic brawls might, ensue. CASE FOR. NEW ZEALAND GOODS, Replying to representations made on behalf of all goods manufactured in New Zealand, Mr Coates said the effect of the exemption would be to place a 5 per cent., primage duty on all imports in contradiction to the agreement made with . the United Kingdom to reduce the existing primage duty. The Leader of the Opposition pointed out that the raising of the exchange rate was equivalent, to 15 per cent, duty on Bril Mi goods. NO EXEMPTION FOR PIPE TOBACCO. A motion by Air. Barnard (L.) to include pipe tobacco in the exemptions was discussed for some time. Mr. Barnard contrasted the treatment of pipe tobacco and cigarette tobacco and his argument that if the latter could be exempted, it was reasonable to expect the same concession for the former, was supported by Mr. Carr (L.). The motion was rejected by -.*< votes to 20. Air. Langstone (L.) sought a concession in respect of native timbers The motion was defeated by 3/ votes The committee stage of the Bill was completed at 12.19. BILL PASSED. MR. HOLLAND OBJECTS TO PREMIER’S THREATS. Speaking on the third reading, the Leader of the Oppositoin protested against a statement to the Press by Mr Forbes that more business would be conducted by Order-in-Counci 1 h the event of a. repetition of the obstruction tactics by the Opposition. He said the statement, amounted to a. threat to destroy the power of Parliament, and declared that Die United Party {had been electee; o office on a programme that was directly opposed to government by, Orc.er-in-Council. Air. Holland characterised the attitude of Mr. Forbes as “highly dangerous.” . The Bill was read • a third time b> 37 votes to 23, and passed and the House rose at 1.25 a.m. A