Evening star., 1932-05-20
BY JAMES MONTAGNES.
ARTICLE NO. 3.


4 sales tax. That is the consen-
sus of opinion expressed by
" manufacturers, wholesalers, re-
tail merchants associations,
boards of trade, trade journal editors,
and other Canadian business men
uueried by The Star in Toronto, the
second largest city In Canada, and the
largest manufacturing center in the Do
minion. Canadian business prefers the
sales tax as it Is now administered in
Canada to a turnover tax. That Is a
unanimous opinion.
The fact that sales tax is preferred
to a tax at even a small rate on every
transaction of an article from the raw
state to the finished product sold to the
consumer, does not mean that the sales
tax Is a popular tmpost. There is
hardly any tax which is popular. But
taking the attitude that the govern
ment needs money, Canadian business
feels that the sales tax solves the prob
lem adequately.
Nurse Grievances.
Manufacturers are not in favor of
the tax. They have accepted it, but
Their attitude is that their acceptance
Is not sign of approval. They have
number of grievances against the tax
They are not SO much opposed to the
principles of the tax as an impost, but
rather against its administration. They
point out that under existing regula-
tions the manufacturer Is left largely
to his own Interpretation of the regu-
lations in so far as they concern what
constitutes partly manufactured goods,
since some articles are capable of
further manufacture If necessary.
The manufacturers object to discrimi-
nation as against large and small manu-
facturers, certain classes of small manu-
facturers such as plumbers, opticians,
tinsmiths, druggists, picture trainers and
other small concerns selling their prod
ucts exclusively by retail, being exempt
from the sales tax. Merchant tailors,
photographers, small saw mills, cider
mills. Job printers doing less than $4,000
of business a year, are others exempt
from the tax 1t is the claim OF the
larger manufacturers that such con-
Germs can sell cheaper because they
have no tax to pay, and can in this way
compete to the detriment of the larger
business.
Object to Computation Cost.
Among other grievances Is the cost
of computing the sales tax, which soma
of the larger firms claim takes the serv-
ice of two or three clerks. No allow
ance for this cost Is made. Refunds
are allowed on goods required for
further manufacturing If sold by un-
licensed firms to licensed concerns. In
some lines of business there Is a great
deal of material so bought, and since
separate form has to be filed accom-
panied by an affidavit for each refund
required, this means considerable work
and clerical cost.
These are in the main adminiStra-
ton difficulties which affect a certain
percentage Of manufacturers. They can
be smoothed out, 1t Is claimed. But
what is a big grievance Is the alleged
inadequate auditing service maintained
by the government. Because OF this
firms are liable to heavy fines and in
terest on even small items as many as
seven or eight years old, made Though
honest error by some clerk. A more
adequate check by sales tax auditors,
it is claimed, would greatly relieve such
situations.
To aid manufacturers in smoothing
out their difficulties, the Canadian Man
ufacturers' Association maintains two
experts on the Job, who are busy every
day dealing with sales tax and other
tariff questions, but largely with the
sales tax.
These points are mentioned in detail
to show some of the difficulties encoun-
tered in the administration OF tax
which has become closely interviewer in
Canadian business during the II years
since it has been in force.
Convenient to Collect.
One large retail merchants associa-
ton states that of all merchandising
taxes the sales tax, under its present
form, is the most convenient Of collec-
ton. Like all other business organiza-
tions, the retailers of the Dominion are
opposed to a turnover tax or tax on
retail sales. This, it Is claimed, would
raise a barrier between the consumer
and the merchant, since the question of
tax on every purchase would come
up, driving the public from buying. The
present method, whereby the consumer
is unaware of the tax he Is paying, is
painless process which does not take
away from the sales total.
Another factor which business points
out against turnover tax is the COM
plicated method Of collection required
by q tax on every transaction. The
TURNOVER LdA WOuiu lcQoAc oil duly VI
collectors to delve into every little cor
ner grocery store. Many small retailers
do not keep adequate books, their pocket
being their bookkeeping system in many
cases. To compute the turnover from
all such businesses would be an almost
impossible task. And, again, the cost
of collecting such tax would be too
great, while the small margin of profit
made by most small retailers would not
stand the tax.
A sane and economic system, the
present sales tax has been called by
one business organization executive. A
board of trade official stated that it is
tax which spreads over all the people,
u