IMPORTANT CHANGES

Stratford Evening Post, Volume II, Issue 178, 23 February 1933, Page 5

IMPORTANT CHANGES

SALES TAX BILL REDRAFTED CLAUSES Measure Overhauled Though Principles Not Altered f Press Association.—-Copyright. ■t** Wellington, Feb. 22. —Some important changes to the Sales Tax Bill have been made "last a result of the redrafted clauses brought down in the House of ; Representa-.». fives by the Governor-General's' message to-day.' 5 .■" :l ‘a |a < n e The' clause-;# the Sales Tax has been extensively overhauled, although the main principles have not been altered.

Explaining the amendment tin Hon. J. G. Coates, Minister ■ f Finance, said that as the Bill wm? orig-‘ inally framed goods imported f>y wholesalers, retailers (including manufacturing retailers) tint! the general public for their own use were exempt from the Sales Tax. Goods imported by the wholesaler for his own use were in the same position. Since the Bill was introduced the Government had gone further into the matter and had concluded it would be more satisfactory if the Bill were so framed as to impose a tax in such cases. No doubt cases of difficulty, administrative and otherwise, would occur under the amended proposals, but any such matter could be dealt with as it arose. It was not at present intended that the Sale's Tax should be collected on every packet, however small, imported by post by private persons for their own use. It was considered that the cost of collection in such cases would probably be greater than the tax which would be collect--64. That matter, along with many others, would bo gone into as soon as the Bill was passed. Continuing the Minister said the Bill in its original form provided that a Sales Tax on goods made by manufacturing retailers should be levied on the sale value. In another part of the Bill it was proposed that- such manufacturing retailers should be allowed to deduct from the tax payable on manufactured goods the amount of the Sales Tax paid in respect to any materials used by them in the manufacture of those goods. It was recognised, however, that if that provision had not been altered it would have been necessary for manufacturers- to keep separate records of those materials upon which tax had been paid after February 8, and those in stock prior to that date. The proposals contained in the amendments enabled

manufacturers cither to deduct from, the sale value of manufactured goods the taxable value of materials used, or to deduct from the Sales Tax payable the tax already paid on materials. The new provision would be of great assistance to retail manufacturers. Another amendment to the Sales Tax clause was designed to ensure that where allowance was made on account of tax on material the taxpayer would not be able to deduct disdou'ut or any part of it a second time. Refunds Further new provision enabled refunds of Sales Tax to be made where warranted on material in making non-taxable goods. Several alterations had also been made to another important clause which sets out the procedure for determining the sale value of goods for the purposes of taxation. The object of one alteration is to provide that the tax shall be paid on the credit price and not the cash price. The Minister said that if this were not done it would cause grave inconvenience to recognised commercial practices throughout the Dominion. In the original draft it was provided that in the case of goods imported into New Zealand and entered for home consumption the sale value should be equivalent in New Zealand currency to the value of those goods for Customs duty plus the amount of the Customs duties payable, plus a further 20 per cent. It is now proposed that this 20 per cent, should be increased to 25 per cent.

The Minister explained that it was considered that th e original provision did not do relative justice between wholesalers and retailers. The new provision states that except with the consent of the Comptroller of Customs, granted subject to such conditions as he thinks fjt, no person shall be licensed as a wholesaler and as a manufacturing retailer at the same time. The Minister explained that there were certain firms in New Zealand respecting whom it was believed they were wholesalers in certain centres and retailers or manufacturing in others. It was considered that as the Bill was originally'framed it' was doubtful whether persons could be licensed as: wholesaler or as manufacturing retailer at one centre without being regarded as being so licensed at all centres in New Zealand. The object of the alteration was to enable the department to overcome that difficulty.

As promised in committee the Minister has also arranged for the deletion of reference to securities when licenses are being granted. By another alteration the selling or manufacturing of goods hy an unlicensed wholesaler shall involve a breach of the law only when the taxable goods are traded. During the committee discussion the Minister promised to consider the j question of allowing costs to appel'ant if he succeeded in appeal against assessment of sale tax made by the

collector. The amendment allows for reasonable costs to be obtained in such circumstances. A clause in the original draft of. the Bill enabled the Crown to recover sales tax from persons owing money to the taxpayer. The amendment exempts wages from that provision. Several changes have been .made in the nenal clauses of the Bill. One stipulates that any information of an offence under or the proposed legislation must bo laid within five years of the date of the commission of the alleged offence. Another amendment restricts the arrest of persons without warrant to suspected offenders about to leave New Zealand.

Explaining another amendment, the Minister said the Bill as Introduced enabled a person wha had entered into an agreement after the taxes wore imposed to add to the contract price the amount of any sales tax paid by him. As every person was after the introduction of the resolutions in a position to protect himself only with contracts entered into before February 9. Provision to that effect had accordingly been made. The object of another amendment was to provide that the wholesaler, should pay on his invoice the amount of tax payable on goods. The Minis ter said that this was advisable not only in the interests of the purchaser of goods and of the department, bpt also to enable the manufacturing retailer to know the amount of tax actually paid on his materials, f»r which claim might be made. > Recovery It was also proposed that provision should be made by which a vendor might recover the amount of the taxshown on his invoice. The Minister said it was understood that in Australia certain retailers refused to pay the sales tax to wholesalers until a similar provision was inserted in the Commonwealth law. Now the clause provides that it shall be an offence to set out on invoices an amount representing the sales tax, when such tax is not payable in respect to such goods. Mr. Coates said it had como to the knowledge of the Government that certain business firms were issuing invoices showing as shies tax amounts inexccss of : those actually paid or payable. , . Saving Clause With the objecc of giving the taxpayer the benefit of any alterations made in the , basis jof the taxation between the introduction of the resolutions on February 8 and the passing of the Bill a saving clause has been inserted allowing collectors of Customs to make appropriate refunds. This has been rendered necessary by the alteration made in tile schedule of exemptions.

The final amendment provides that all Orders-in-Council, including regulations under the 8.11, shall be tabled in both Houses of Parliament within 14 days of being gazetted if Parliament is in session, otherwise within 14 days of the opening of the session. Provision is made by which the House of Representatives may decide that any such Orders-in-Council shall be revoked or varied. in the event of that course being taken provision is made for a refund of excess sales tax.

Some of the more important items removed from the list of exemptions from sales tax are surgical dental and opticians’ instruments and app iances, scientific instruments, and appliances, artificers’ tools, margarine Various detailed items exempting packing materials have been deleted and two general headings to cover all containers have been reinseited. Books for educational purposes, libraries etc., and newspapers, have been omitted from the schedule, and a new item to exempt printed books, music and newspapers has been included in the exemptions. Some of the more important items added to the list of exemptions from sales tax are cofiins, tombstones stock and poultry foods, hemp and tow tallow, sausage skins, wool, hides, skins and pelts, wrapping paper, milks (condensed or preserved) cornflour, egg.. ( fresh preserved and pulped), lune, meats’ (cooked), water, meat, wraps cheese bandages and caps, cordage and twine suited for fishing lines and nets yeast, milk and cream cans, malt’, candles, certain dairying machinery and appliances, postal trankmg machines, and tar. BILL NOT RUSHED THROUGH* Mr. Coates Replies to Labour Critics ORDERS-IN-COUNCIL THREAT Press Associat 'Wellington, To-day. in the third reading debates of the Sales Tax Bill in the House of Representatives,’Rt. Hon. J. G. Coates, Speaking at 1 a.m. this morning, said members of the Opposition had claimed the Bill had been rushed through Hie House, yet 1G hours had been spent on the second reading and 51J. hours in committee. There had been 571 speeches and 78 divisions. Continuing, he said the measure met the need of the moment. He would. not attempt to defend it on logical grounds. It was necessary and that was all. One pleasant feature had been the ready way in which the community generally had come along and helped to make the Bill as workable as possible. A great deal of patience would

be required and he appealed to the Opposition to assist. He assured them the Government would welcome any assistance they could give in the administration of* a difficult Bill. The Leader of the Opposition: Would you mind saying whether the Prime Minister’s statement that more business will be transacted by Order* in-Council, is the. intention of the.Gbyi eminent? Mr. Coates said he could quite understand the Prime Minister’s statement in view of the manner in which the Bill had been obstructed. If Parliament would not agree to give the Government a hand with legislation there would be only one course to follow. The Bill was read a third time and passed.