NEW CUSTOMS TAXES

Grey River Argus, 1 May 1942, Page 5

NEW CUSTOMS TAXES

Minister’s Explanation P.A. WELLINGTON, April 30. Explaining the customs resolutions presented to the House, the Minister of Customs, Hon. A. H. Nordmeyer, said the first resolution made provision for increased duties on imported manufactured tobacco, cigars, beer, spirituous beverages, and wines. The resolution provided for an increase of fifty per cent, in the basic tariff, instead of fifteen per cent, increase, in respect of spirits and wines. This woirld mean that the duty on a bottle of whisky would be increased from 5s 9d to 7s 6d. A second resolution brought new duties into force in the Cook Islands. WEAK .BEER. The third resolution provided for an increase of one shilling per gallon in the duty on New Zealand beer,. not exceeding 1036 worts in specific gravity. Where that specific gravity is exceeded, one penny per gallon is paid for each unit exceeding 1036. Conversely, there will be a reduction of one penny per unit for each unit below 1036 down to and including 1207, when the duty will be 2s 3d per gallon. The Minister said the reductions in specific gravity meant that the alcoholic strength of the beer would be reduced. The increase in duty proposed may result in an increase of one penny in the price of the reputed pint of beer, but a reduction in gravity would mean saving in the brewers’ material cost, and any price increase would be the subject of an investigation by the Price Tribunal. N.Z. TOBACCO TAX. The fourth resolution provided for the increased duty on locally-manu-factured cigarettes, tobacco and cigars. The additional rate, he said, was approximately two pence on each packet of ten cigarettes, or 16s 8d per thousand, and proportionately, when the sales tax of ten per cent, was taken into account, of five pence per ounce of tobacco, or 6s 8d per lb. In addition the’ basic rates of 25 per cent, imposed in 1939, had been abolished, and embodied in the proposed specific increases. The duty on locally-manufactured cigars, said the Minister had been increased by one shilling per lb. The fifth resolution dealt with the sales tax, and it was proposed to double the rate of tax upon the taxable goods, making the rate twenty per cent., except on the following goods, including fixed price goods, in respect of which the existing ten per cent, rate would apply:—Apparel, -clothing, hosiery, not including hats and other headwear, except miners’ and firemen’s helmets; blankets of wool or containing wool; ■boots, shoes, sandais, slippers 'and other footwear; sole leather; textile piece goods of wool, or containing wool; yarns of wool or containing wool; foodstuffs, namely baking powder, coffee, roasted cream of tartar and its substitutes; gluten flour, tea, timber, hewn, sawn or dressed; and joinery; tobacco manufacturers, namely, cigars, snuff, tobacco, cut tobacco and other manufactured. He said tobacco remained at ten per cent., as additional taxation was effected in another manner. Mr Nordmeyer added that the list of exemptions from the sales tax was a wide one. For example most foodstuffs, farm produce, fresh vegetables, prescription • medicines, drugs and chemicals for use in hospitals, industrial machinery, etc., were exempt from any sales tax. It was proposed, in the sixth resolution, that New Zealand manufactured wine should bear an additional sales tax at the rate of twenty per cent., making forty per cent, in all. .

The seventh and last resolution provided for a reduction of the rate of discount for prompt payment of sales tax from 21 per cent, to per cent, where tax is paid at the rate of twenty per cent, or over, It is difficult to forecast the additional revenue which would, in existing circumstances, be collected, said Mr Nordmeyer, but it was. estimated as follows: —Tobaccos £l,BOO thousand; beer, wines and spirits £1,000,000; sales tax £3,700,000; making a total of £6,500,000 additional revenue. It was for the War Expenses Account and he was confident the public of New Zealand would cheerfully bear the added imposts as part of the war effort. After all the resolutions had been passed, the House rose at 9.25 until 7.30 on Wednesday. An interesting point is that cigarettes are to be sold at the existing prices at the canteens to soldiers. This was emphasised during the debate on the resolutions by the Minister of Defence, Hon. F. Jones, replying to a query by Rt. Hon. J. G. Coates.