TOBACCO DUTIES

Grey River Argus, 22 August 1934, Page 6

TOBACCO DUTIES

Changes Explained WELLINGTON, August 21. Referring to some of the more important items, Mr Coates said the Government had decided to modify the duties on tobacco. Under the original resolutions, the tariff rate on imported leaf tobacco was reduced from 2s 6d per lb to Is 6d per lb, and the excise duties on the leaf were increased to approximately the same ex i tent. In addition, duties of l}d and 14d for every 60 cigarette papers were imposed under the British preferential and general tariffs. “The Government has received a large amount of information since the original resolutions came down,” he said, “and has decided to modify the duty on leaf tobacco, fixing it at 2s per lb when it is to be used in the manufacture of tobacco, cigars and snuff, and at 3s per lb when used in the manufacture of cigarettes. The excise duties on those products have been adjusted accordingly. The use of New' Zealandgrown leaf in the manufacture of to bacco has assumed large proportions. Unless some unforseen development occurs, it is difficult to see how its use in the manufacture of tobacco can be increased to any very considerable extent. There appears, however, to be a possibility of the use of large quantities of local leaf in the manufacture of cigarettes. With a view* to encour aging the use of New Zealand leaf for this purpose, it has been decided to increase the duty on imported leaf for making cigarettes to 3s per lb. In my view* the proposals now made

should be satisfactory to local tobacco growers. I am, of course, aware they are apprehensive as to the effect of any reduction in the duty on imported leaf, but that there cannot be any real warrant for this view is evident from the fact that one of the large local manufacturers has, since the resolutions came down, placed contracts for the purchase of local leaf to the extent that they would have done under the old tariff, and at substantially the same prices. Under the proposals now* made, growers are placed in relatively a better position than obtained at that time. It has become apparent that some system of regulation is required if the tobacco industries are to be conducted on a satis- , factory basis in New Zealand having regard to the interests of the growers, manufacturers, and the general community. It has been suggested by growers (hat a committee or board, to act as a supervisory body, should be set. up, consistent of representative growers and manufacturers, and placed over by a Government official. The functions of such body would be to consider regulation in respect to the following: (a) The quantity and quality of leaf to be grown; (b) the quantity to be purchased from time to time; (e) the grading of leaf; and (d) the price to bp paid for such leaf. The Committee could also deal with other relevant matters that might be referred to if. The manufacturers have, in general terms, expressed approval of the proposal, and the Government intends to proceed with the matter, which will be dealt with bv the Minister of Industries and Commerce. He will go fully into the question, and arrange tor legislation with this end in view to be introduced later this session. It has been pointed out that, owing to the increase in the excise rates of duty, and the fact that the leaf is cleared before it is use! in manufacture, higher agg rebate duties have been paid than were contemplated by the resolutions passed bv the House. It is proposed, in the Bill, to provide for refunds of dutv in such cases. Owing to alterations included in the amending resolutions, it may also happen that with respect to tobacco thereafter cleared, less aggregate duty will be paid than is intended, and it is proposed to make provision in the Bill for the payment of additional duty. Although the provision as to the refunding of duties Will take effect from the 30th ultimo, no claims for extra duty will be made with respect tn any manufactured to bacco already cleared. “VVijJi respect to cigarette papers, the Gorerament has decided to reduce the duties to .1,1 per p. |( .| ( ~| nf l';'l”-rs under Ihe British Preferential lariff, and to :|<l per packet under the General Tariff. 7 am advised that this will enable cigarette papers in packets of. til) of good quality to be sold -it 2d per packet.”