HIGHER PRICE FOR CIGARETTES

Otago Daily Times, Issue 26606, 31 October 1947, Page 6

HIGHER PRICE FOR CIGARETTES

Foodstuffs Exempted From Sales Tax Parliamentary Reporter. WELLINGTON, Oct. 30. Smokers will have to pay an extra 2d or 3d for a packet of 10 cigarettes as the result of Customs resolutions introduced and adopted by the House of Representatives to-night, but at the same time the remaining items of foodstuffs subject to sales tax will be exempted from that tax. Although the resolutions embodying the new rates of tobacco duty become effective immediately, the increase in the cost of cigarettes and tobacco arising out of them will be subject to the approval of the price tribunal.

The Minister of Customs, Mr, Nash, tvho explained that New Zealand was buying tobacco mainly from the United States, said the adjustment in tobacco duty would tend to reduce consumption and save dollars which Britain owned and required for her own purposes. The Minister said the additional revenue on the present basis of consumption of tobacco would be about £700,000, while relief from sales tax on various articles of foodstuffs would amount to about £950.000, One Rate of Duty

Mr Nash said that, instead of two rates of duty on imported tobacco leaf, there would in future be one. At present the duty was 3s 9d a pound on tobacco leaf imported for manufacture into cigarettes and 2s 6d a pound on tobacco leaf imported for manufacture into tobacco. That was considered to be an anomaly, and there would now be one duty of 3s 9d a pound on imported tobacco. The existing sales tax was 10 per cent, on manufactured tobacco, and there was no sales tax on manufactured cigarettes. It was now proposed to have a uniform sales tax of 10 per cent.

Under the present method of two duties there was a tremendous amount of work for excise officers in determining to what use tobacco coming out of bond was to be put. The Leader of the Opposition. Mr Holland: What is the effect on the smoker? Mr Nash said he thought it would mean 2d or 3d extra for a packet of cigarettes A 9d packet would cost lid or Is, probably lid. Mr R. G. Gepard (Oppn., Ashburton): Try acid drops! Mr Nash said the adjustment in tobacco duties would tend to reduce the consumption of cigarettes and tobacco. New Zealand was buying tobacco to a large extent from the United States and thereby using dollars, and to the extent that New Zealand used fewer dollars so we would make dollars available to Britain for foodstuffs. In Britain the charge for a packet of 20 cigarettes was 3s 4d, and he believed that the price had been increased, whereas the price for the same packet in New Zealand was Is lOd. Removal of Sales Tax All that had been put on tobaccq was being given away by taking the sales tax off the remaining items of foodstuffs subject 'to that tax. He could not see any justification for New. Zealand using Britain’s dollars to sel cigarettes 'at a cheaper rate in this country when Britain was charging her people a high rate to get them to reduce the use of tobacco. Mr Nash then read out a list of goods it was intended to exempt from sales tax. He said that with this list bf exemptions there was t now no sales tax on any foodstuffs, on any clothing, or on building materials. The sales tax on all these items had now been wiped out. The list of foodstuffs to be exempted from the sales tax is as follows; Baking powder and baking soda, biscuits colours or dyes (natural or artificial) for colouring foodstuffs, essences (culinary or flavouring, in solution) fish fruits, meats and vegetables (dried, canned or preserved). Fruit, pulped gelatine, isinglass, syrup l (including maple sugar and maple syrup), meat curing preparations, milk on cream (preserved, evaporated or dried, in combination with casein), sugar of milk or other milk product, moulding starch, arrowroot and potato flour, nuts (shelled, cracked or ground), nut pastes and nut meals sauces, chutney, soy and catsup, sage, thyihe and other culinary herbs (mixed or unmixed), spices (ground or unground), tea, vinegar, white oi yolk of eggs (whether desiccated, liquid, frozen or other), also any similar preparation of egg goods, gram and pulse (ground or manufactured) chicory, cocoa and chocolate, coffee (roasted), coffee (essence), cocoa butter coconut butter and other vegetable butters or fats, glucose, grape sugar and caramel. Jams, jellies, marmalade and preserves, macaroni, vermicelli, spaghetti egg noodles and similar alimentary pastes, mustard, capers, caraway seeds, caviare, cayenne pepper, curry powder curry paste, olives, ground tumeric candied and drained peel, pickles, custard powder, egg powder, blancmange powder, cream of tartar, cream of tartar substitutes, calcium phosphate, phosphate of soda and pyrophosphate of soda.