MOTOR-CAR DUTIES

Evening Post, Volume CXII, Issue 54, 1 September 1926, Page 11

MOTOR-CAR DUTIES

ALSO TIRES

THE BODY PROTECTION ISSUE.

Tho new duties relating to motor vehicles not only affect motor-car bodies, but also motor tires and bicycles (both motor-bicycles and ordinary "bikes"). Foreign-made ears, bicycles tires, etc., will pay an extra 10 per cent. The present duty of 10 per cent, ad valorem on British motor vehicles will remain, and the ad valorem duty of 25 per cent, on foreign will be raised to 35 per -cent. The flat rate on motor bodies will become an ad valorem rate, which will bo levied as on the value of the whole car (not the body alone), but-which will,be reduced in percentage when it comes to be levied on dearer cars, so thajj.»ho tax will not become too heavy. To illustrate this point, take the case of British cars.; Under the Government's new plan, a British motor-car valued at £200 will pay^ 10 per cent, duty oil that amount (yielding- £20), and also another 10 per "cent, duty on that amount as body. duty (yielding another £20); so the total duty on this £200 British car. will be £40. Now, suppose the British car is worth £400; it will be taxed at 10 per.cent. on £400 (yielding £40), but the second 10 per cent, (as body duty) will be levied not on the whole. £400, but only on the first £200 (yielding £20), and the second £200 of r.-.r value will be charged (as body duty) only 5 per cent., yielding £10; total yield of tax on the £400 car, £70. If the so-CAlled body tax were not reduced in rate after passing the £.200 value mark, then, the total yield in tax would have been £80; and on an £800 car it would havobeen £160, which figures the Government deems too high. Under the plan adopted the £800 car will be taxed £130 (10 per cent, on £800, plus 10 per cent, ori £200, plus 10 per cent, on £600).

So much for British cars. On foreign cars the percentage charged (as body duty) on value in excess^of £200 will be 7J per cent., as compared with 5 per cent, on the British. The Minister of 'Customs appears to think that if a £20 levy on a £200 car is sufficient to protect the New Zealand motor body builder, his protection does not need £40 on a £400 car; £30 should bo enough.

The extra 10 per cent, on foreign motor tires should prove a heavy item. The full ramifications of the new du.tios are hardly yet realised, but they will bo considerable