CHAMBER OF COMMERCE.

Star (Christchurch), Issue 5568, 18 May 1896, Page 3

CHAMBER OF COMMERCE.

TAX ON CONSIGNMENTS.

Mr J. D. M'Gowan, Commissioner of Taxes, met the Committee of the Chamber of Commerce this afternoon. There were present— Mr I . Gibbs (in the chair), and Messrs TV. Chrystall, M. Gardner, J. Lanibie, A. Kaye, W. D. Meares, E. W. Roper, W. T. Charlewood, F. Waymouth, J. Palmer, R: Strufchers and the Hon E.-W. Parker. Mr P. Heyes, accountant of the Property Tax Department, was also present. The Chairman said they had asked Mr M'Gowan to meet them to discuss the question of the tax on consignments. Mr Chrystall pointed out that the proposal was to place a tax of 7$ per cent on the net cost of consignments, and that this, in many cases, was more than the actual profit. He did not know what basis had been employed in arriving at the amount of the tax, but he supposed that it was taken on the general average of the import business. Mr M'Gowan said that this was not so. _ Mr Chrystall 1 thought there were pnly six lines which came under this heading, and as a matter of fact the general average profit on consignments was about 3£ per cent. This was proved by the fact that several flourishing businesses which had j lately been turned into companies were not even paying that. Moreover, the ' interest paid by merchants was not allowed for. . Mr M'Gowan pointed out that invoices coiild not be taken- as a fair representation of the value of goods, as many of them, did not show the actual cost. He pointed out that if .merchants were paying interest on advances they were allowed to deduct it in their returns. Mr Chrystall said that in New South Wales they only charged £thper cent on gross profits. • j MriJopersaid this was equal to 2* per cent on consignments. Mr M'Gowan said he had lately been in New South Wales, 'and he "was quite certain that neither property nor income tax had yet been collected there. Mr Roper contended that New, Zealand was now charging three times as much as it was proposed to levy in- New South Wales. Mr M'Gowan said that when he left Sydney a short timeago the same proposals as the taxes here wero in ,type, waiting to be gazetted, and he did not think there had been any alteration since, though it was possible there might have been. Mr Heyes pointed out that the tax proposed to be levied was 7£ per cent on the actual cost to the consignee after all expenses had been deducted. Mr M'Gowan pointed out that in many of the invoices sent out from Home, the prices were inflated, and therefore these could not always be taken. In trying to arrive at a just tax he had first thought of 5 per cent, but on going through returns supplied he had come to the conclusion that 7£ per cent would be fair. . However, he was not wedded to any particular amount, and would be glad to respect any advice given by the mercantile community. He would like to know whether it was the general opinion that 7-V per cent was too large. -, Mr Struthers said in some cases it was not, but in others it was.

Mr Heyes pointed out that 7i per cent was intended to be the maximum, and in some cases, where le3s profits were made, there would be reductions.

The Chairman read a letter from Mr Frostick, pointing out that many of the consignments sent out were merchants' surplus stocks from the year's transactions, and they came - into competition with the same class of goods which had come out under consignments in the ordinary way. It was pointed out that many of these lines had depreciated quite 50 per cent ;before Reaving London. These goods stood in the way of legitimate prices being obtained for first-class goods. Mr M'Gowan said the object of the tax was to allow the merchants to know what to deduct, so as to save disputes afterwards. f Left sitting.]