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Border Tax Decision Flawed

Border Tax Decision Flawed

Federated Farmers of New Zealand (Inc) condemns the select committee decision to push ahead with a $20 million tax grab to fund tighter border security rules, said Tom Lambie, President of Federated Farmers of New Zealand (Inc).

"Farmers vigorously oppose the so-called "goods cost recovery" tax which was inserted without consultation into the Border Security Bill. The government administration select committee on Wednesday reported the bill back to Parliament.

"The security measures being implemented are in the public good -- like the police and armed forces -- and therefore farmers and other exporters and importers strongly oppose the imposition of a border security fee.

"The fee is just another tax dressed up by the government as a 'charge' for its services," Mr Lambie said.

The Minister of Customs announced last year that as of 1 July 2004 a border security fee would be imposed to recover $20 million a year from the operating costs of X-ray machines and additional Customs staff. The extra costs apply to all traders, even though only the United States has tightened its border security rules.

The proposed security fee is to fund a "solution" for something that Customs has decided is a problem without consultation with industry.

About 85 percent of agricultural production in New Zealand is exported and those exports amount to approximately $16 billion, or 55 percent of exports. The bulk of the new tax will inevitably be paid by producers.

"Farmers are already facing the Big Squeeze -- profits margins crushed by the higher New Zealand dollar, weak global economy, and higher compliance costs. This new tax adds weight to the wall of costs pressuring farmers," Mr Lambie concluded.

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