SALES TAX BILL

Taranaki Daily News, 11 February 1933, Page 7

SALES TAX BILL

POWERS FOR COLLECTING SPECIFYING PLACE OF TRADE PENALTY FOR NO LICENSE SETTLEMENT OF DISPUTES RECOVERY OF PAYMENTS By Telegraph.—Press Association. Wellington, Last Night. The Sales Tax Bill was introduced by Governor-General’s message in the House of Representatives to-day and was read a first time. For the purpose of collecting the sales tax under the Bill, which will be administered by the Customs Department, the Minister is empowered to define convenient districts and to alter their boundaries from time to time as he thinks fit. Places for payment of the tax may be appointed in each district. Any person may on application be licensed by the Collector of Customs as a wholesaler or as a manufacturing re r tailer, these two classes of traders bemg directly affected by the Bill. On being registered these traders may be required to give securities. ‘ • If a person intends tp carry on the business bf a wholesaler or manufacturing retailer in two or more districts he will be required to procure only one license, the fee-for which shall be £l. The wholesaler or manufacturing retailer may trade only at the place or places specified on the license, but should he wish to extend his trade the collector shall without payment of any additional fee grant the necessary permission by endorsing the license. All licenses shall remain in force until they are surrendered or revoked. . PENALTY ON THE UNLICENSED. For the selling or manufacturing of goods while unlicensed a penalty of a fine equivalent to the sale value of the goods or of £lOO, whichever is the greater, is provided. For the carrying on of a business at any place not authorised under the license a penalty of £lOO a day is provided. On ceasing to carry on business as a wholesaler or manufacturing retailer the licensee shall immediately surrender his license to the collector. Discretion is left to the Minister m special cases to decide whether a person who carries on business as a wholesaler or manufacturing retailer need be licensed. . Tn respect of the period between February 8 and March 31 every person required by the Bill to be licensed shall be deemed to be duly licensed. The section dealing with the imposition of the sales tax at the rate of 5 per cent, of the sale value of the goods liable to the levy follows the text of the resolutions passed by the House on Wednesday. If the sales tax has been paid already in respect of any materials used in the manufacture of those goods an appropriate deduction shall be made on production of satisfactory evidence of such payment. If a dispute arises as to whether any material has been used in- the manufacture of any goods the power of making the final decision rests with the Minister. POWER TO EXEMPT.

The list of exempted goods is incorporated in the schedule attached to the Bill. In addition power is given to exempt further classes of goods by Or-der-in-Council and to revoke exemptions already given. The method of computing the sale value of goods is set out in the Bill in terms practically identical with the resolutions already published. In the case of dispute the Minister is given power to make the final decision. The obligations imposed bn wholesalers and manufacturing retailers to make monthly returns showing the aggregate amount of sale value of all taxable goods sold is set but in another clause, which follows closely the explanation given in the statement made by the Minister when the resolutions were before the House. Those failing to make a return within the prescribed period are liable to a fine of £lOO or to a fine of the amount of the sale value of the taxable goods which should have been shown in the return, whichever is the greater. ' ■ The sales tax becomes payable on the delivery of the return to the collector. There will be a discount of 5 per cent, of the tax for prompt payment, but if any tax remains.unpaid after two months from the due date an additional 10 per cent shall be charged, provided the Minister may, in any particular case, for reasons which in his discretion he thinks sufficient remit wholly or partly the additional tax. Power is given to the Comptroller of Customs to collect sales tax from any person owing money to the taxpayer. PRINCIPAL LIABLE FOR AGENT. A principal will be required to accept liability for every Act done or declaration made by his agent, in relation to the sale, ! manufacture or importation of goods, and the principal shall be liable accordingly for all sales tax, fines and penalties. 1 An agent winding up the business of an absentee principal is required to set aside a sufficient sum out of the assets of the principal as appears to the Comptroller to be sufficient to meet the sales tax. Failure to make this provision renders the agent liable to a fine of £lOO. Similarly the liquidator of a company is required to give notice of windingup and to set aside the sales tax. If he fails to make provision for the payment of the tax he shall become personally liable.

In the case <of the death of a taxpayer who has not paid the whole of nis tax the collector shall have the same powers and remedies for assessment and recovery of the payment from the executors or administrators of the taxpayer as he would have had against the taxpayer if he were alive. PROCEEDINGS TO RECOVER. At any time within a year after the payment of sales tax the person by whom the payment was made may institute proceedings against the Crown for a refund of whole or part of the tax on the ground that it was not lawfully chargeable or that it was charged in excess. Action may be taken whether the error alleged is one of fact or of law. In those instances, however, where the Minister’s decision is final on any question in dispute no further action may be taken. If the Comptroller is satisfied the taxation has been paid in error, whether of fact or of law, he may refund the amount on application being made at any time within three years after payment has been made. All moneys refunded by the Comptroller or any Collector shall be recoverable by action by the Crown at any time within three years of payment or without time limit if the refund has been obtained by fraud. Drawbacks of sales tax paid on goods.

exported from New Zealand may be allowed under similar conditions and restrictions as are applicable to drawbacks of duty under the Customs Act, 1913. A Collector may impound and retain any document presented in connection with any return made under the Bill, but a copy shall be given to the person concerned and may be used in all courts as evidence. ’ • A Collector is also empowered to question persons as to particulars shown in any return and he may call for the production of documents or the giving of proof by declaration to substantiate the correctness of a return. A taxpayer who fails without reasonable excuse to make such declaration or produce the documents required shall be liable to a fine of £5O or a fine of the amount of the sale value of the goods in respect of which the return is made, whichever is the greater. , • The Collector or Comptroller may also require any person to. produce for inspection all or any receipts, records, or other documents relative to any goods With reference to . which any question has arisen.' Refusal to conform to any such requisition renders the taxpayer liable to a fine of £5O. An order of this nature may be directed, also to any corporation or local authority or to any officer or member of those bodies. AUTHORITY. TO SEARCH. • . / Customs officers may be provided with sales tax warrants, and these carry authority to enter and search any building, house or premises at, any time if there| is reason to believe there are, goods on which sales tax has become due and payable and is unpaid. Documents may. be perused and copied during the search and. the copies used as evidence. Any person who obstructs an officer acting under this authority'shall be liable to. a fine of £2OO. .. ; ~ t \ . ?• The Bill stipulates that, the Collector shall have the right to require and take securities for the payment of sales tax and generally for compliance with the Bill and for the protection of revenue payable under it. Pending, the giving of security he may refuse to issue a license to the trader. , . j Security, may be in the form of a pond or a guarantee to the Crown or in the form of a cash payment or by all of these methods, and security may be given in respect of any particular transaction, or with respect to any class of transactions, and it may cover any-such period and be under such conditions as the Collector thinks fit. Any security or bond entered into by persons under the age of 21 shall have the samp force and validity as if the persons concerned were of full age. The Bill makes it legal for agreements for the sale of goods made prior to the passing of the Bill to be modified. Thus if a seller is liable to pay sales tax on such goods he may add the tax to the agreed price. Further, if goods are added to or removed from the exempted list by subsequent amending legislation or by Order- in-Council similar adjustments may be made. A clause in the Bill ratifies the resolution passed by the House on February 8 and gives it force of law as from that date until the passing of the Bill. Power is given to the Governor-Gen-eral to remit fines. Regulations may be issued to determine the minimum amount of sales tax that need be collected on any goods. Any sales tax which if assessed in terms of the Bill would be less than the minimum so prescribed may be remitted if the Collector thinks fit Mr. Coates said in the House to-day that concern had been expressed by a number of citizens that the Holy Bible was not included in the . exemptions from the tax. He could give an assurance that the tax would not be imposed in this direction. >'