Substantial Sales Tax Relief

Chronicle (Levin), 16 August 1946, Page 6

Substantial Sales Tax Relief

The present rates of saies tax are high and were designecl, first ly, to provide portion of the reveuue required for war purposes, and, secondiy, to discoiirage expenditure on eonsumer goods during the war period. The Goveriiineat proposes to make the maximum reductions possible with the funcls avaiiable as quicltly as possible. One methoil would be ro reduce all items bearing a 20 per cent. saies tax to, say, 10 per cent. Such an ad.justment, however, would have the disadvantage tliai it would not beiieiit such items as timber and clothing, which are alreadv taxed at the rate of 10 per eent, The

Government are particularly anxious to reduce building costs, while clothing is an essential item in living costs, and any savings woukl be of direct benelit lo the public. Consequently, as an alternative to a general reduction from 20 per cent. to 10 per cent., the t ari 11' scliodule has been earefully examiiied, and it is proposed to make individual reductions according to the necessities of tlie particulur items with the object of benehting families and hoinebuilders. To this end it has been decided to abolish entirelv the saies tax on (a) All building materials, including timber, cement, building paper and wallboard, glass, hardware, wallpaper, paint, bricks and roohng materials. (b) Clothing of all descriptions. (c) Household fumishings of all kincts, including perambulators. (d) A miscellaneous number of items including dried and dehydrated fruits and surgical and dental instruments. To the extent that the items coneerned are at present being subsidised for stabilisation ]>urposes, the subsidies will be disoontinued as soon as administrativelv possible, but nevertheless the net ell'eet of these adjustments' will be substantially to reduce living costs gene rally. Tlie exemptions from saies tax which 1 have mentioued will involve a loss of revenue for a full year oi' £7,000,000, but as these will operate for six months and a half only of this year the eoncessious tliis year will mean a reduction of £0,800,000.