By BRIAN FALLOW
The treatment of cars is top of the hate parade in submissions on what the Government's review of the fringe-benefit tax regime should address.
Associate Revenue Minister Paul Swain said the majority of the 68 responses received considered the AFT system to be complex and costly.
"They included ideas on ways to reduce the cost of complying with the tax and to simplify both the process and the rules."
Most commented on the treatment of vehicles, the valuation formula the key area of concern.
Although the formula makes some allowance for depreciation, it is considered inadequate and also anomalous when ownership is compared with leasing arrangements.
Another concern arises from the fact that the test for being a fringe benefit is that the car is available for private use, which is tough in cases when the only private use actually made of the vehicle is conveying someone to and from work.
Car parks are also a vexed issue.
The tax laws exempt from the definition of a fringe benefit something provided "on the premises" of the employer. That includes leased car parks, but not those that are licensed. If a firm arranges and pays for the proprietor of a pubic car park to make parks available for its employees, it is regarded as a taxable perk.
Concerns were raised about low-interest loans, especially those provided by financial institutions for their own employees at rates that in some cases might also be available to the wider public.
Although there is a "de minimis" cutoff of $75 per employee per quarter, below which perks are not counted, laptops and cellphones can sometimes be caught in the tax net.
They also give rise to valuation issues.
Concerns were also raised over subsidised health insurance and the FBT exemption for employees of charities.
Swain said the next step would be the publication in August of a discussion document setting out the Government's proposals for change in the FBT regime.
That would provide another opportunity for interested parties to have their say.
Cars hottest issue in fringe-benefit submissions
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