SALES TAX FOR N.Z.

Hawera Star, Volume LII, 31 January 1933, Page 4

SALES TAX FOR N.Z.

ANNOUNCEMENT EXPECTED GOVERNMENT SEEKS REVENUE. EXPERIMENTS IN OTHER, COUNTRIES. It can now be definitely stated (says the “Dominion”) that one of the Goverment’s proposals for raising a substantial part of the additional taxation of £2,400,000 estimated to be required for next year, will be the imposition of a sales tax. The possibility of such a tax being levied has been hinted on several occasions recently, the first definite reference to this form of taxation being made by tlie Econo mic Committee, which reported in Feb ruary, 1932, when it was stated that £1,000,000 might ibe raised by this means. Authoritativie information forthcoming yesterday, however, brings the proposal into certain prospect. The rate at which it is proposed to levy the sales tax has not yet been disclosed. 1t... is unlikely that the full details of the taxation null be announced until after the two no-confidenc-e motions before the House have been decided. In any event, final decisions have not yet been reached on all the various alternative taxation suggestions. There was every prospect of a sales tax being imposed, a year ago, and a Bill on the subject was actually printed. However, it was later found possible r to make financial arrangements which enabled the Government to refrain from saddling the taxpayers with additional burdens. On this occasion, however, the prospective deficit in the 1933-34 Budget is so great that a continuance of the respite is not considered possible. " TAX IN OTHER COUNTRIES

Where it has been applied the sales tax has given a heavy revenue, yield. In Canada in 1927-28'it amounted to 34.7 per cent, of the total internal revenue and to 19 per cent, of the Dominion’s total tax revenue. In Germany, Czecho-Slovalaa, France, Belgium, and Austria the proportion or total tax revenue varies from 15 per cent, in the case of the first up to 22 per cent, in the last-named country. ... There are various modifications of the tax. In Canada it applies to -ales made to retailers only, whether by manufacturers or wholesalers. In other countries it is levied on all sales, and a Single commodity may be taxed five or six times in its course from the original raw material to the ultimate consumer. , The form adopted after repeated experiments in Canada is known as the single-turnover tax, and in other countries as the multiple-turnover tax. The rate for each sale is fixed lower under the multiple form, but serious objections to its application arise out or its complexity and the greater risk or evasion. Neither form is adopted by some countries, in which the tax is applied to retail sales only. So applied as dan readly be imagined, it tends to become a nuisance- and source or irritation. CANADA’S EXAMPLE.

Canada’s sale tax appears to be regarded by authorities as a model or its land.' It is to-day the improved product of repeated trials and amendments since its first enactment m 19-0. The' list of exemptions has been r«peatedlv changed; the rates were raised from 1 per cent, m 1920 to 6 per cent, in 1923, were stepped down again, to 3 per cent, by 1928, and m 1931 were raised again . Similarly, methods of collection have been adjusted and readjusted, the object being to secure certain payment once, but not more than once, on any commodity. Post-war necessity was the mother of fiscal invention m the case of the sales tax. In several European countries it ranks second only to income tax as a revenue producer. It was recommended to the Australian Premiers’ Conference, m -the following * words, to quote from what; is known as the “Copland Plan”.; “In an emergency of this kind, -when income taxation is reaching its limit, recourse must be had to some form of taxation which falls on everyone’s consumption without directly increasing the cost of production to any considerable extent.” . . The recommendation, adopted by the Premiers, was that the sales tax be increased from to 6 per cent, to yield an extra £5,600,000 the total estimated yield being thus £9,600,000. Basie foods were to be exempt and possibly also the more important goods which are direct instruments of production, such as machinery, fertilisers, cornsacks, etc. WAIPUKURAU OPPOSED. CHAMBER OF COMMERCE VIEW. WAIPUKURAU, Jan. 31. Endorsing unanimously the executive’s earlier protest against higher exchange a largely-attended general meeting of the Chamber of Commerce recorded a- strong opposition against the likely imposition of a sales tax wliic-h is regarded as an undue burden on business people and consumers. It also was resolved to ask Parliament to review the unemployed position because the scales were not followed and the benefits were not standardised. They were especially low at Waipukurau, being at the rate of 18s Id for married men with up to two children and 23s 3d for larger families.