Super, hit, fringe tax starts today
PA Wellington The controversial fringe benefits tax and the surcharge for some national superannuitants take effect today. A pay rise for the Gover-nor-General and legislation to try to stop cats and dogs being registered as the owners of cars so that their masters can thwart parking tickets, are among other measures which come into force at the start of the new financial year. About 130 car dealers are now also likely to face hefty tax bills through a sales tax amendment passed by Parliament. Under the Income Tax Amendment Bill (No. 2), fringe benefits such as the private use or enjoyment of a vehicle, low-interest loans,
and free, subsidised or discounted goods and services will be taxed. There will be exemptions for: • Goods sold to employees for more than the cost price or the lowest normal wholesale price. • Staff discounts on lowvalue items such as groceries. • Vans, utilities, and similar vehicles used to travel between work and home. They must have an employer’s name on them. • Charities so long as the benefits are not going to employees of a business carried on by the charity. The Opposition strenuously opposed the measure during its passage through Parliament and unsuccessfully sought to amend it.
It has since said that the next National Government will review the tax to remove anomalies such as taxing work-related vehicles that do not provide a private benefit.
The national superannuation surcharge, which also comes into effect today, was altered after its announcement on Budget night. The changes, passed by Parliament recently, allow a married couple to split their income from sources other than national superannuation and have an exemption of $10,400 before the new. 25 per cent tax applies. A single national superannuitant will have an exemption of $6240 before the surcharge is imposed. The Government says
that about a quarter of superannuitants will be affected by the surcharge.
The measure also was opposed by the National Party which said Labour had confirmed before the election that it would not alter the scheme in any way if it became the Government.
The price of bulk electricity is up 25 per cent from today. The Government announced the rise on Budget night in November, saying that the average household electricity bill would be expected to rise about $2 to $3 a week.
The price of non-export sales of coal from State coalmines will also rise an average of 35 per cent. The Governor-General, Sir David Beattie, gets a
pay rise today, making his salary $60,000 a year, taxfree. From now, the Gover-nor-General’s salary will be determined by the Higher Salaries Commission.
Changes relating to traffic infringement processes also take effect. The legislation follows a Commission of Inquiry into the administration of the District Court in Wellington.
The new law introduces a two-month period, starting on the day the traffic infringement notice is given, either to the motorist or owner of the vehicle. If the fee is not paid within that time the defence that it had been paid before proceedings began will no longer apply. The legislation also makes it an offence to give
false or misleading information about the owner of a motor-vehicle, aiming to prevent vehicles being registered in the names of animals to thwart paying fines.
An amendment to the sales tax repeals provisions relating to limited licences of wholesalers of motorvehicles. About 130 people holding such licences are now liable to pay sales tax on their stock.
There have been reports that the move will result in some of the dealers having to pay up to $1.5 million each on their stock.
The Minister of Customs, Mrs Shields, told Parliament that about $230 million was estimated to be due in tax as a result of the measure.
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Press, 1 April 1985, Page 1
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629Super, hit, fringe tax starts today Press, 1 April 1985, Page 1
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