THE NEW SALES TAX

Taranaki Daily News, 17 February 1933, Page 12

THE NEW SALES TAX

IMPROVEMENTS SUGGESTED DEDUCTION FOR BAD DEBTS. ANOMALY FAVOURS RETAILERS. Several suggestions designed to improve the working of the sales tax legislation and to remove anomalies which have been found in the Bill now before Parliament have been made by a special committee of the Auckland Chamber of Commerce, set up to consider in detail the Government’s proposals. The committee, which embraces all sections of the business community, yesterday reached the following decisions, which were incorporated in a letter forwarded to the Minister of Finance, the Right Hon. J. G. Coates, last evening:— (1) As regards the exemption of sales as between wholesaler and wholesaler it is noted that under the present proposals no schedule of licensed wholesalers is available or likely to be available for some two months. In our opinion, wholesalers should be required to make applications for licenses uy, say, February 22, so that a list of licensed wholesalers may be available at an early date. (2) As between sellers and buyers, we feel that the onus should be placed on the purchaser to show that he is exempt from sales tax. (3) The resolutions do not appear to make provision for the exemption from sales tax of sales which become bad debts. We consider that all proved bad debts should be deductible from the total amount of sales on which tax is leviable. 1(4) A similar position arises in connection with 1 credit notes and deductions for goods returned, and other similar credits. We consider that it should be made clear that the amounts of such credit. notes are deductible from the amounts' returned for sales tax purposes. What is the position regarding cash discounts—are they deductible before assessing sales tax? DEFINITION OF “SALE." (5) A clearer definition is required of what constitutes a “sale” for purposes of the Act. Is the date of a sale the date, of the completion of an irrevocable contract ,for saie; is it the date of the passing of the property in tfie goods or the date of the change in their, possession? Are. indent contracts booked before February 9 for forward delivery to be held liable to or exempt from the sales tax? (6) In view.of the extended terms of credit which many merchants have had to extend to, storekeepers we consider that 28 days after the final date of the rendering of sales tax returns should be fixed as the period during which the 5 per cent, discount should be claimable by sales tax payers. L (7) If a license fee is found necessary in connection with.wholesale traders, we think the amount should not be more than ss. (8) If the sales tax levy proves inadequate in yield we consider the rates of taxation should not be increased, but that the list of exemptions should be narrowed. In any case, the list of exemptions is regarded by us as too long; as in most businesses the larger the nun ber of exemptions the greater the amount of clerical work the preparation of returns in connection with the sales tax will involve. ' 7 ■ . (9) There appears to be an anomaly as between wholesalers’ and retailers’ liability for tax. The proper basis for assessment of sales tax on goods imported by retailers should be not 1.2 times the sum of the value for duty purposes and the amount of the duty, if any, but 1.2 times the sum of the c.i.f.e. value and the,, amount of the duty, if any. This would bring the assessment basis for importing retailers substantially into line with the basis on which the wholesaler is (10) We would urge that every endeavour be made to facilitate the smooth operation of the Act and to minimise the inconvenience to the business community. We would further suggest that the present staff in other Gdveriiment departments could be utilised rather than increase the number of civil servants. (11) We consider that it is desirable that the amount of sales tax should require to be shown as a plusage on all invoices as such a practice would assist the department’s inspecting officers. (12) The Auckland Chamber of Commerce commends the Government in allowing the business community full rights of appeal beyond the administrative officers of the department.