HEAVY BURDEN ON COMPANY

Southland Times, Issue 23991, 5 December 1939, Page 8

HEAVY BURDEN ON COMPANY

Government/s Share Of Profits I/. ON 2OZ TIN OF TOBACCO (Special to The Times) AUCKLAND, December 4. “Never has the company passed through a period so full of worry and anxiety,” states the report of the National Tobacco Company, Limited, Napier, for the year ended October 31. It adds that the economic position has gone from bad to worse, and it was a matter for congratulation that the company had been able to extricate itself practically unscathed from all pitfalls and difficulties. “The burden we manufacturers are carrying has become heavier every year,” the report continues. The ta. on tobacco has again been increased by a further 25 per cent. True, as an offset, we were allowed an increase in the price to the customer, but not commensurate with the additional tax. On every pound of New Zealand-grown leaf, which costs us, say, 2/-, we have now to pay 5/7J in excise duty alone, besides 2/6 Customs duty on any foreign leaf we may want to use for blending. The combined duties, excise and relative proportion of customs amount to 7/2 per lb, or lid for a 2oz tin. Ada to this the sales tax, and you arrive at a total of 12d. “Smokers, therefore, will realize that every time they purchase a 2oz tin of New Zealand tobacco, say, at a cost of 1/9, no less than 12d goes to the Goveminent in the form of taxation, leaving the manufacturer 9d to cover the cost of leaf, the processing and manufacturing of this leaf, tins, canisters, containers, paper and other packing material, freight, distribution and wholesale and retail profits. Expressed differently, 55 per cent, of the purchase price is taken by the State, and the remaining 45 per .cent, is divided between grower, manufacturer, merchant and retailer. “And last, but not least, if the manufacturer should manage to squeeze out of this amazing bill of cost a meagre profit for himself, the Commissioner of Taxes presents him with a demand for income tax at the rate of .10/- in the pound as an appropriate finishing touch to a prosperous financial year.”