Vol. 246 No. 8
The purpose of this Resolution is to authorise the introduction of legislation increasing the general rate of turnover tax from 2½ per cent to 5 per cent as from 1st May, 1970. Paragraph 2 of the Resolution is designed to ensure, in advance of the passing of the Finance Act, that the increased rate will apply as from 1st May.
Turnover tax is payable monthly in arrear and the first payment at the new rate will be due in June of this year.
Both these resolutions are in line with the ones passed on Budget Day?
Yes.
Will the Minister say whether it is clear that the extra turnover tax must be paid on existing hire purchase agreements and must this extra 2½ per cent be paid on debts outstanding prior to the 1st May?
Yes, it must. When the turnover tax was introduced originally an exemption was made in the case of certain existing contracts and so on but it was so widely abused that it has not been possible to apply that on this occasion. It is intended to give some form of relief on the lines of what was adopted when the wholesale tax was introduced but this involves what the Deputy says, that is, the application of it to existing contracts.
Does the Minister not see the injustice of it, particularly in hire purchases cases, where those who could not afford to pay cash down went into an agreement over a period of 18 months or two years to purchase certain things; they now must pay an extra 2½ per cent just because they did not have enough money to pay cash down in the first place.
I doubt if it could be said of any legislation that it achieves ideal justice and I would not purport to claim it for any legislation. All I can tell the House is that we tried before, when the turnover tax was introduced originally, to meet this situation and it was found to be impossible to avoid fairly widespread abuse.
Is the Minister aware that at present there is a practice throughout the country by traders who claim they did not add on the original 2½ per cent and are now charging an extra 5 per cent straight on existing prices? Will the Minister attempt to have this matter investigated before it gets any worse?
I can tell the House that the prices section of the Department of Industry and Commerce would not be prepared to accept that this was a valid increase.
Would the Minister investigate it now because the only way it can be stopped is by Government investigation? It is a general practice. Every Member, including the members of the Minister's own party, must be aware of this at present.
Any complaints received are being investigated.
Would the Minister explain to the public what the 5 per cent means to them? It is not actually 5 per cent—it is 5½ per cent. Would he not agree on this and would he not make this clear to the public who have doubts about it? It is 5 per cent on 5 per cent which the traders charge. Would the Minister make that clear now?
I think this has been made clear in official statements.
The public are not aware of the fact.
