Simplification of the Law
27.A6. The sales tax law comprises nine assessment Acts and regulations, nine rating Acts, an exemptions and classifications Act and regulations, and a procedure Act and regulations. When first enacted, the nine assessment Acts each contained schedules of exempt goods, while the nine rating Acts levied a single rate of tax on all taxable goods. In 1935, with the increase in the number of exempt items, the exemptions were removed from the assessment Acts and included in the Sales Tax Exemptions Act. Later, when different rates of tax were applied to particular classes of goods, schedules of such goods were included in the Act and its title was changed to the Sales Tax (Exemptions and Classifications) Act.
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27.A7. The Sales Tax Procedure Act was introduced in 1934 primarily to simplify procedures relating to the classification of goods and recovery of tax under nine assessment Acts. Provisions were subsequently added setting out the circumstances under which refunds of tax are permitted and authorising the remission of tax in cases where the Commissioner alters a ruling he has previously given.
27.A8. It was thought necessary at the time to enact nine separate assessment Acts because of the requirement of the Constitution that a law imposing taxation shall deal with one subject of taxation only. This remains one of the reasons for not amalgamating the present enactments; another is that a restatement of the law using different words would create new problems of interpretation, the meaning of the law as expressed in the nine assessment Acts being now well settled. The Committee is therefore not prepared to recommend any change in the present structure of the law.
27.A9. It has been suggested in submissions that procedures would be simplified and collection costs reduced if sales tax were converted into a manufacturers tax. The Committee does not favour such a step: it would reduce the base of the present tax by omitting the wholesaler's margin of profit, thus conflicting with the principle that a commodity tax should have as broad a base as possible.