Company cars to be taxed?

Press, 25 March 1980, Page 1

Company cars to be taxed?

PA Wellington Company cars provided with a job should be taxable, according to a Commission of Inquiry into taxing of travelling allowances.

Mr William Wilson, an Auckland accountant who conducted the inquiry, recommends that the annual taxable value be based on 12 per cent of the cost of the car. Mr Wilson has also recommended that salary and wage earners be allowed a general tax rebate of $52 a year in partial recognition of the costs of travel to and from work. The two recommendations were announced last evening by the Minister in charge of the Inland Revenue Department (Mr Templeton). It is the second statement he has released about Mr Wilson’s findings, but the first did not refer to company cars or the general rebate.

Mr Templeton said the two recommendations were “matters which need closer study” by the Government. “There are many prob-

lems associated with the taxation of company cars and these would need to be resolved before any move was made in this area,” Mr Templeton said. Other recommendations by Mr Wilson that were contained in Mr Templeton’s statement last month and repeated last evening, were that: — In terms of the present law, all cash allowances paid to cover the costs of travel to and from work are taxable and the Commissioner of Inland

Revenue has no power to exempt them.

— The law should be amended to permit the commissioner to exempt cash travelling allowances which are paid to cover the cost's incurred because of the unavailability of public transport. Mr Templeton said the Government was in general agreement with the findings of the report as it related to cash travelling allowances and amending legislation would be introduced later.