Travel tax explanation

Press, 23 October 1980, Page 21

Travel tax explanation

!’ The Income Tax Amend ment Act, which was passed by Parliament at the end of [last month, and nart of ’'which came into effect on October 1, has still not left the Government Printing Office. The Commissioner of Inland Revenue (Mr R T. Phillips) has sent an explanatory: note to employers telling! /them how to apply the newprovision in the act, relating! to changes in taxation of ■ cash travelling allowances. The Deputy Government Printer (Mr V. R. Ward) has: said that copies of the act should arrive at the Christchurch bookshop of the Government Printing Office b> I todya. ■ The provision which came jinto effect in October 1. reflating to the travelling I allowance is section 9 of the , act. which was inserted by! Parliament in response to a' recommendation by a one-; man commission of inquiry’ : (Mr W. Wilson) who report-! ; ed back to the Government! ■ in February this year. The commission was ap- •■ pointed in May last year (after a dispute involving

staff of Air New Zealand, who went on strike when the former Commissions or Inland Revenue. Mr T M. Hunt, ruled that the allowances should be taxed. The setting up of the commission of inquiry was one of the terms of the settlement reached between the Government and the Federation of Labour. The Minister in charge of the Inland Revenue Depart-: ment (Mr H. C. Templeton) said in February, when the commissioner's recommendations were released to the public, that Air New Zea-; land staff would be one of the main groups to have the travel allowances exempt from tax. Mr Phillips says in the ci-j rcular io employers that; under the amendment the basic rule of non-exemptioni from tax for travel between 1 home and work still applies.) hut that any allowance paid; in respect of “additiona' transport costs" because of; certain factors can he ex ; enipted on application to the! commissioner. “Subject to one exception,: additional transport costs' means the costs incurred byi an employee by reason of! certain special ’ factors but; only to the extent that those! costs exceed what the’ employee would normally. i[ incur in travelling between! home and work,” says Mr” Phillips. The special factors include!' the time of day when the/ employee is required toi;

work because of overtime m shift work, the need te transport work-related tools, and temporary changes in the workplace in relation to the same employer. Mr Ward said that the Printing Office received the act from the House of Representatives on October S.