COST OF SALES TAX

Chronicle (Levin), 29 June 1946, Page 4

COST OF SALES TAX

+ The loading which the present saies tax placed on consumer prices was illustrated bv Mr. Frank IVilson in a discussion on taxation at a meeting of the council of the Wellington Chamber of C-'ommerce, states the chamber. {cIt is doubtful whether the public have a real appreciation of the extent to which this tax has been responsible for the increased consumer cost of many items in recent years,'' he said. "While certain goods are whoUy or partly exempt from saies tax, the faefc remains there are a multiplieity of items on which the full rate of 20 per cent. applies," said Mr. Wilson. "Saies tax colleetions confirm this, as reccipts for thp^year ended March 31, 1045, and difart^Vj^l^g^were ■ aifd £l5,065;OQp/resp^6'tiveiy, of whieli War Expenses Aecbunt '' 'ree-eive'd . a|)|ir#iiftately 70 per cent. a"qd»ithe ^onsd&d'atdd Fund the balanee. "As this tax represents an integral part of the retailers ' cost, it must -bear the eustomary mark-up in arriving at selling prices to the customer. Margins provided on goods vary according to the typc of eommoditv, and are determined b\- the priee control authorities. For example, the mark-up on cost may run from say 15 per cent. to 33 1-3 per cent. but assumingian average of 221 per cent. it will be apparent that with this loading, although no more than necessary to cover retailers' normal expenses and margins, the consumer is called upon to pay something in excess of £18,000,000 .annually, Probably no single item in our cost sl^'ucture would exeeed this figure, with the exception of wages," • Mr. M. G. G. MeCaul eontended that tlie saies tax should be diverted to social security- — that was the only way in which such tax could be justifed.