Only 8% of firms paid ‘perks’ tax

Press, 24 April 1986, Page 30

Only 8% of firms paid ‘perks’ tax

PA Wellington Only 8 per cent of companies paid fringe benefits tax for the 1986 financial year, aiding Treasury coffers by $lO4 million, Inland Revenue Department figures show. The first year of fringe benefits tax officially ended on Sunday, when the last quarterly payment for the financial year was due. Revenue earned from that period would show on the 1987 financial year tax take, yesterday estimated to be $145 milion. The 92 per cent of companies that did not pay tax said that under the tax structures they were not liable to pay.

Analysis of payments in the 1986 financial year showed company cars responsible for 70 per cent of all fringe benefits tax paid, followed by cheap loans (21 per cent). The remaining 9 per cent of tax was derived from subsidised travel and services, said the Assistant Commissioner of Inland Revenue, Mr David Henry. Because of the high number of companies filing nil returns the department recently announced administrative changes allowing those companies to file annually rather than quarterly. The changes are expected to save the depart-

ment about $2.3 million, reducing the annual administration bill to $6.6 million. Mr Henry said there had been no estimates of what the fringe benefits tax would bring-in and he would not comment on the rate of returns. Policing of the tax was by routine audits of both nil and liable companies’ payrolls. Last year about 15,000 payrolls were looked at, Mr Henry said. Staffing reductions since administrative changes would not affect payroll auditing and it was estimated that 15,000 inspections would be made in the 1987 financial year.