Evening star., 1932-05-18
The Sales Tax i'm Canada
"Painless" Nature of Levy and Great Economy in
Collection Favored by All Parties; Unfdr
DupGcations Ayoided

ties for failure to make returns even
il there are no returns to report. And
in so far as sales tax on imports are
concerned these are for the most part
collected in cash at the time the Gus
toms duty is paid. an operation adding
little to the cost of collecting customs
duty.
Like many other taxes started for
wartime revenue needs, this tax has
seen many changes since it first went
into force AS mentioned, the system
of collection was charged in 1924, but
prior to that the rates were changed
a number of times and started out in
1924 with 6 per cent. Pressure and
good business combined to bring the
rate down as each budget was an
nounced in Parliament, per cent re-
ductions coming into force each year,
till in 1880 the rate was down to |
per cent and the abolition of the tax
loomed a possibility. A change in gov
ernment however. spelled the doom to
that hope: There was in addition
falling off in revenue, due to the gen.
eral business depression, which brought
smaller income tax and customs rev.
enue, with the result that the sales
tax once more zoomed upward to
per cent. In April of this year the rate
was raised once more to the former
highest figure OF per cent, and that
is the tax now in force.
Probably due to the long st.,ndi of
ne x. there been little on !tion
or criticism of the present tax In
fact, it may b. said that while there
was slight furry at the increase of
2 per cent this year, practically all
business was surprised that the in
crease was not greater In many quar-
ters the sales tax was expected to be
superseded by {. turnover tax This
would entail a more complicated book
keeping and collection system and be
more costly of collection for the gov
eminent, 1t is said.
This last increase was foreSeen by
business in general in the Dominion
The philosophy of the average business
man on hearing the announcement was
to the effect that he realized the coun-
try needed the money and he was
therefore prepared to carry on without
grumblng.
1t must not, however, be presumed
that there was no criticism. For the
first time, to take an example certain
lines of foodStuffs were taxed with the
| impost. Bakers cakes and pies, as we'll
as Ice cream, were taken from the eX-
empt list Deputations sailed forth to
Ottawa to protest But the phrase
luxury foods" was the governments
reason for the tax.
Regarded as Trade Curb.
There have been other criticisms
The sales tax has been called a "nui-
Sance tax" hindering business. 1t has
been pointed out that 1t is harder on
the poor man than on the rich man,
since 1t is APPLICABLE to such a large ex-
tent on the necessities of life Domes-
tic industries have claimed that it did
not give them any addet advantage
over foreign manufacturers importing
into Canada, but rather favored the
outside concerns, since the Canadian
manufacturer has to pay a sales tax on
his machinery.
But the government has felt justified
in its application of the tax, since it is
tax on spending rather than on in
come. And that it is in favor with all
Canadian government parties is shown
by the fact that it was started by the
Conservatives was run up to its peak
by the Liberals and gradually lowered
by that party and has been increased
again to its former peak by the Con-
servatives. The sales tax has become a
Candd = institution.