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Time for Lodgment of Returns

27.A10. Persons liable to pay sales tax are required to lodge a sales tax return within twenty-one days of the close of each month disclosing the sale value of goods sold during that month and the tax payable on them. Tax is also payable within the same twenty-one days, remittance of tax normally accompanying the return. There are similar requirements regarding the lodgment of returns and payment of tax where goods are applied to a taxpayer's own use or, in the case of a manufacturer, are transferred by him to stock for sale by retail. It has been said that these requirements are unfair and that the time for payment of tax should be considerably longer than the twenty-one days now allowed. The contention is that taxpayers should not be required to pay tax before they have received payment for the goods sold. With a levy of this nature, however, it is inevitable that taxpayers will be called upon to pay to least part of the tax before being reimbursed by their customers: this, after all, is a feature of most commodity taxes. Granting wholesalers further time to pay tax will not assist retailers who, in many instances, have to hold tax-paid goods for considerable periods before selling them and obtaining reimbursement of the tax component in the price paid by them to the wholesaler.

27.A11. The suggestion has been put that returns should not have to be lodged until twenty-eight days after the end of the month and that payment of tax should not become due until sixty days later. However, the administrative problems of collection and recovery of tax would be substantial if both these requests were granted. The Committee nevertheless sees some merit in extending the time for lodgment and payment to the last day of the month following the month in which the taxable transactions occur.

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