THE TAX ON FOREIGN CONSIGNMENTS.

Otago Daily Times, Issue 10625, 21 March 1896, Page 6

THE TAX ON FOREIGN CONSIGNMENTS.

A merchant who has* been in basioess since 18+2 (writing to the New Zealand Times) puts the case as follows against ths proposal to tax the assumed profits of foreign consignors (tho term " foreign" signifying merchants or exporters re*ideut beyoud the colony of New Zealand) which IS occasioning indignation and alarm iu ovary purt of the colony, for many traders recognise that their commercial extinction may follow the imposition of this tax :— "Within the past few days meetings of the Chambors of Commerce have been held at Dunedin, Wellington, Auckland, and Nelson, at which resolutions have baen unanimously passed, strongly (ondemniag the tax, and the basis on which the comrnissionerx proposes to arbitrarily assess same—viz., 5 to 15 per cent, on the net proceeds of each consignment, according to the popularity of the goods sold. It is evident that the commissioner questions the policy of this measure, otherwise he woald, in my opinion, have brought into operation long ere this the act that was passed as far back aa 1832, empowering him to levy this obnoxious tax, which toe mercantile community regard as impolitic and contrary to principle. Now, the commissioner, or perhaps I should say the Minister in charge of his (the commissioner's) department, is disbinctly wrong in two important assumptions—(l) that the profits on consignments are Urge; and (2) that consignors pay charges disproportionate to the benefits they derivs throngh the dispocal of their gooda by agents resident in this colony. As to (1), merchants can conclusively prova that, in many cases, consignors sustain positive losses on the sale of their ventures, whilst rarely, if ever, do tho net returns reach 10 per cent. Yet, loss or gain, it is FCriously proposed to arbitrarily nssess profits on all consignments from sto 15 per cent. Can one conceive a more unjust or improper method of assessment ? It ha» been said that this act was passed for the benefit of traders in this colony—to protect them from the competition accruing from the »ale of oonsigned goods. Such protection was neither a«ked for nor required, for the class of goods that are shippad, in the majority of eases, on consignment are those that do not find a ready sale, through export ruer<-h:inf,r. in countries wliers theaimeare manufnatured or produced, until they have boeu properly introduced and pushed in foreign markets, to wit, Now Zealand and others. Through excessive competition, traders are unabln to exist, and have for some years baen uuable to exist, upon the profits to be derived frctn the importation of goods which they are and httva been compelled to purchase outright. This accounts for the disupptaranoe of many old-established houses during the past decade who havo not possessed, or controlled, valuable agency lines. Those in business to-day, with tbe aid of these agencies, despite critical times, continue to survive; they maintain large staffs of ol«cks, salesmen, travellers, storemen, &c. ; pay large sums for municipal rates, income tax, advertising at Government railway stations, &c — aggregating, in many individual instances, several thousands of pounds annually—and generally contribute to the well-being of th« State. The imposition of the tax ou consignors will, I am confident, disturb existing relations, create much friction, and most probably result in the withdrawal of several of the most profitable acoouots held by consignees at the present time. This spells ruin to many traders oud consequent loss of revenue to the colony, besides throwing many hands out of employment, further, may not the enforcement of this tax induce reprisals in other countries — the United Kingdom, for exnmplo —to which we export produce, on consignment, to the extent of several milliou pounds sterling per annum ? For the sake of the small amount which we should collect through ths insistence of this tax is it wise to risk the contingency I have indicated P We know that, under the oid property tax act, consignors did pay a direct tax. To this I reply that little, if any, revenue was derived under tbia meanure, for consignees regulated their stocks in such a fashion that they rarely held more thau £500 worth of goods on account of each consignor, by which process they escaped taxation, the exemption beiup JBbOO. Under the land and iucome tux of 1892 no exemption is allowed. In conclusion, I de*ira to lay particular stress upon the fact that consjguora, through their agents, already contribute very materially to the revenue of the country; and, in view of the possibilities I have mentioned, it would be mo«t impolitic to harass them by the tax to which I have referred in this letter."