Air N.Z. to pay $2M in perks tax

Press, 14 October 1985, Page 38

Air N.Z. to pay $2M in perks tax

PA Wellington Air New Zealand is having to pay about $2 million this year in fringe benefit taxes.

Most of the tax is payable on cheap air fares — a perk available to virtually all of the airline’s 7000 staff.

The company only pays tax on one quarter of the full value of fares because tickets are usually conditional. For. example staff travelling on cheap fares generally have to give up .their seats to full-fare pay-

ing passengers and if a plane is full they are often wait-listed.

The State owned airline refused to give details of its tax liability when the information was requested by the “Evening Post” newspaper in August It cited a section of the Official Information Act as its reason for non-disclosure but the information has now been released after a review by the Ombudsman’s office.

An airline spokesman said that the first quarterly pay-

ment of the tax was $447,503 and the estimated liability for the year would be between $2 million and $2.2 million.

The main fringe benefits giving rise to this liability were subsidised transport, holiday travel, and company cars.

Another State-controlled enterprise, the Development Finance Corporation, has given information on its fringe benefit tax liability after a review by the Ombudsman.

It originally asserted that this information would “prejudice significantly competitive commercial activities” as spelt out in section 8(a) of the Official Information Act

After the Ombudsman’s review the corporation’s treasurer, Mr E. M. Johnson, has released information that its estimated liability for the year was $330,000.

“The main benefits which gave rise to the fringe benefit tax liability are staff lending at concessional rates and company cars.

The Ombudsman’s office is continuing a review of non-disclosure decisions by the State Insurance Office, the Government Printing Office, and the Security Intelligence Service.

From information available so far it appears that one-sixth of total Government revenue from the new tax will be coming from Government departments and trading organisations.

Estimated total fringe benefit tax revenue for the year is expected to total $9B million of which about $l6 million will be paid by departments and quangos.- JO