THE SALES TAX

New Zealand Herald, Volume LXXIII, Issue 22493, 10 August 1936, Page 8

THE SALES TAX

One of the undertakings given by the present Government, before winning its way to office, was to abolish the sales tax. It has not made any move to do this in the present Budget, the explanation being that time has not permitted consideration of this or any other taxation problem. It may be so, but when there is time, it is still not certain that the Government will easily part with an important source of revenue such as the sales tax has become. For the first quarter of the present financial year, the amount collected was £126,275 greater than for the corresponding period in 1935-36. The Budget estimate allowed for an increase of £437,399 over last year, to a total of £2,900,000. At the rate shown in the first quarter —not necessarily a sufficient indication — the increase will be £505,100. As the most active trading portion of the year is still to come, the collection will probably be a good deal greater, and the total more than £3,000,000. How important the tax has become is shown by the following table, showing what has happened since the first full year of collection Budget revenue Sales tax P.c. of £ £ Revenue 1933-34 23,492,749 1.847,333 7.86 1934-35 26,126.094 2,170.503 8.30 1935-36 1936-37* 31,067,000 2,900,000 9.33 * Estimate The Government has said in effect that it has produced only an instalment of its spending programme. That being so, it will not be easy to part with a source of revenue that is approaching 10 per cent of the Budget total. It is a remarkable position for a tax that has been in existence for less than four complete years. Its productive and buoyant nature puts it into the class to which the Ministers of Finance and the Treasury cling with all their strength. It will not be surprising if difficulties keep cropping up in the way of fulfilling the promise about the sales tax.