Evening star., 1932-05-22
The Sales Tax i'm Canada
Measure Has Proven Partial Impetus to Business.
Disloeating Effect of Increases Has Been Tempo
rary and Prices Have Not increased AbnormdIy.

There Is some difference Of opinion
in Canadian business circles as to how
much, II any, Of the tax Is absorbed by
business. Most opinions are to the ef-
feet that the consumer pays the whole
tax, with perhaps some profit on the
tax. But, as pointed out, there are
some cases where absorption m-
doubtedly takes place. Where to In
sure sales as against great falling on
Of sales II the tax Is included the tax
has been known to have been absorbed.
But only to defend sales does the manu-
facturer, wholesaler or retailer making
small margin Of profit absorb all or
part of the recent sales tax increases.
Retail Prices Drop.
When the new rates were announced
last April there was certain amount
of kicking by business against this new
tariff, and threats Of greatly increased
prices were the order Of the day. While
there have been some increases in whole
sale prices, retail prices Of some Of the
Arms objecting to the raise have since
dropped, new tax not withstanding.
One line where prices have been
boosted because Of the new tax Is the
liquor business. Since IN most provinces
the new prices were prominently dis
played and announced In the press and
the reason for the raise given. The
liquor business being big revenue pro-
ducer for the provinces, 1t Is natural
that the provinces would not absorb
the new tax, nor has the price of liquor
gone down as has other staple merchan-
disc.
Talking of liquor, distillers and brew
ers doing a large export business have
been unable to claim exemption from
the sales tax on this side of their busi-
ness, since it is illegal to ship liquor to
the United States or any country with
prohibition laws. One of the largest
distillers in the Dominion only few
years ago lost case on the evasion Of
the sales tex on its exports, and was
forced to pay nearly half a million dol
lars In tax arrears and fines Exporters
have to show a through bill of lading
and foreign landing certificates satisfac-
tory to the minister OF finance to get
the exemption on liquor exports, and
this is not obtainable In the present
method of exporting" liquor to the
United States.
Tax Hits Luxuries.
According to the importers, the home
industries are benefited by the sales
tax. According to some, foreign indus
tries anxious to locate in Canada, are
being kept out by the knowledge Of the
high sales tax and the special import
tax Of 8 per cent charged IN addition.
These taxes are payable on the value
of the article plus the customs duty.
Especially importers In luxury lines
claim they have been hit hard by the
tax. AS imports have been greatly
handicapped since the entrance OF the
present government late in 1890, these
special import excise taxes are thought
to be another feature in the Canada
First" program Of the government
In general, the effect of the sales tax
on Canadian business has not been
detrimental, nor has it sent prices up
to an abnormal height. While it Is a
tax that is encountered daily in the
business world, it is the general opinion
Of Canadian business men that the
effect of the tax on business is no
greater than that Of any other tax on
business.