IRRITATING SALES TAX

Hawke's Bay Tribune, Volume XXV, Issue 57, 19 February 1935, Page 6

IRRITATING SALES TAX

Burden to Buying Community MOVE FOR ITS ABOLITION Chamber of Commerce Motion In a letter dealing with the questi'o whether or not the Associated Chambers of Commerce should press for the abolition of the sales tax, the secretary of the Associated Chambers, Mr A. O. Heaney, writing to the Hastings Chamber of Commerce, states that although the 1933 conference rejected the proposal to press for abolition, there were now grounds for revising tho opinions then advanced.

The reason for the attitude of tho conference in 1933 was that tho introduction of the tax was unavoidable nt the time because of the necessity of raising revenue. Now, however, all Chambers were being requested by the executive of the Associated Chambers to reconsider the question.

There is now a distinct improvement in the revenues of the country, the letter added, and according to the Minister of Finance, Air Coates, there would be a Budget surplus at the end of the present financial year. The executive’s view was that taxpayers are entitled to the benefit of any improvement in revenues.

When the sales tax was introdsieed, the official estimate of its yield lor the financial year 1933-34 was £1,847,000. Official figures now show that merely for the six months ended September 30, 1934, the yield from the tax was £1,020,000, as compared with £863,000 for the corresponding period of 1933.

The tax was introduced as an enter gency measure at a time of instabil ty in the national revenues, but it now seemed likely to become a permanency. Only abolition would be satisfactory. Any reduction in the nominal rate of the tax would not reduce the cost cl collection which results to business houses.

In the ensuing discussion by the meeting, Mr H. 8. Harvey said he bad interviewed a number of business people or the Chamber’s behalf, and they were unanimously in favour of the abolition of the tax. It was an error Io say that the tax amounted t'' live per cent. It was much nearer 10 per cent. The tax fell more heavily on the unemployed and the wage-earner than on other classes of the community. The tax might well be replaced by soma other that would fall more on the class that could bear it. Air W. E. Bate said that an indirect tax such as the sales tax gave an opportunity to retailers to raise their price;, more than was necessary to cover the amount of the tax. With a direct tax, 100 per cent, of the amount raised went into the Treasury. With an indirect tax, much of it went into the pockets of the retailers. Air P. Loach and Mr J. Wilson spoke in favour of the abolition of the tax, and Air H. W. C. Baird, who presided, described it as irritating. The burden of the tax fell on the whole of the buying community of the Dominion, he said. Every member of Parliament should have put before him an illustration of how the sales tax was assessed. Few understood it, and few also realised that the invoice value of imported goods was almost doubled before the tax was ‘put on. The meeting unanimously passed a resolution in favour of abolitiou.